M, N and P are the partners in a firm, P retires and the goodwill of the firm is valued at ₹30,000. M and N decide to share the profit in the ratio 3:1. Journal Entry for the adjustment of goodwill will be-

M's Capital A/c Dr     ₹12,500
       To N's Capital A/c           ₹2500
       To P's Capital A/c           ₹10,000
(Adjustment of goodwill)

Old ratio = 1:1:1 (Not given means sharing profits equally)
New ratio = 3:1
Gaining Ratio -
M= 3/4 - 1/3 = 5/12
N= 1/4 - 1/3 = 1/12 (sacrificing)
Firm's goodwill = ₹30000
P share = 30000 X 1/3=10,000
As, N also sacrifice so he will also compensated by M.
So N share in goodwill = 30000 X 1/12 = ₹2500.
Journal entry for the adjustment of goodwill be -
M's Capital A/c Dr.   ₹12500
    To N's Capital A/c             ₹2500
    To P's Capital A/c             ₹10000