Partnership

Retirement/Death

Easy

P, Q and R share profits equally. At the time of P's retirement, goodwill appears in the books at Rs. 3000. P will be debited with _____ amount for Goodwill share.

Rs. 2000

Rs. 1000

Rs. 3000

Rs. 6000

✅ Correct Option: 2

When goodwill already appears in the books at the time of a partner's retirement, it must be written off by debiting all partners' capital accounts (including the retiring partner) in their old profit sharing ratio.

Since P, Q and R share profits equally, their profit sharing ratio is 1:1:1.

When goodwill of Rs. 3,000 is written off:

Amount debited to P's Capital A/c = Rs. 3,000 × $\frac{1}{3}$ = Rs. 1,000

Journal Entry for writing off goodwill:

Account	Debit (Rs.)	Credit (Rs.)
P's Capital A/c	1,000
Q's Capital A/c	1,000
R's Capital A/c	1,000
To Goodwill A/c		3,000

The existing goodwill is removed from the books because it represents an old valuation. Fresh goodwill (if any) calculated at retirement will be adjusted separately through the gaining ratio adjustment between continuing partners.

2026: 24 May Shift 1

Mohit, Sohan and Rahul are partners sharing profits in the ratio of 2:2:1. Sohan died on 30th September 2025. According to the deed, his legal representatives are entitled to:

(a) Balance in Capital Account :Rs. 60,000

(b) His Share of goodwill is valued at :Rs. 19,200

(d) Interest on capital account @ 12% p.a.

Amount payable to Sohan's Executors A/c will be:

2022: 30 Aug Shift 2

At the time of retirement of a Partner the remaining gaining partners should compensate the ______

2026: 11 May Shift 2

On the death of a partner, his share of loss in the firm from the last balance sheet till the date of his death is transferred to:

2026: 13 May Shift 1

An existing partner of a firm passed away/died during the financial year. His share in estimated trading profits for the intervening period will be transferred to :

2023: 28 May Shift 1

On retirement/death of a partner, the remaining partners who have gained due to change in profit sharing ratio should compensate the :

2026: 12 May Shift 1

Narender, Nitish and Naidu are partners sharing profits in the ratio of 5:3:2. Nitish retires. Narender and Naidu decide to share the profits of the new firm in the ratio of 3:2. What will be the gaining ratio of Narender and Naidu?

P, Q and R share profits equally. At the time of P's retirement, goodwill appears in the books at Rs. 3000. P will be debited with _____ amount for Goodwill share.

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