Arun, Barun and Chaitanya are partners in a firm sharing profits in the ratio of 3:2:1. Arun retired and the value of goodwill of the firm is valued at Rs. 1,80,000. Barun and Chaitanya continue sharing business profits in the ratio of 2:1. The journal entry for adjustment of goodwill will be:

Question

Accepted Answer

| Date | Particulars | L.F. | Dr. Amount | Cr. Amount | |---|---|---|---|---| | | Barun's Capital A/c Dr. | | 60,000 | | | | Chaitnaya's Capital A/c Dr. | | 30,000 | | | | To Arun's Capital A/c | | | 90,000 |

Answer

| Date | Particulars | L.F. | Dr. Amount | Cr. Amount | |---|---|---|---|---| | | Barun's Capital A/c Dr. | | 45,000 | | | | Chaitnaya's Capital A/c Dr. | | 45,000 | | | | To Arun's Capital A/c | | | 90,000 |

Answer

| Date | Particulars | L.F. | Dr. Amount | Cr. Amount | |---|---|---|---|---| | | Arun's Capital A/c Dr. | | 90,000 | | | | To Barun's Capital A/c | | | 60,000 | | | To Chaitnaya's Capital A/c | | | 30,000 |

Answer

| Date | Particulars | L.F. | Dr. Amount | Cr. Amount | |---|---|---|---|---| | | Arun's Capital A/c Dr. | | 90,000 | | | | To Barun's Capital A/c | | | 45,000 | | | To Chaitnaya's Capital A/c | | | 45,000 |

List-I	List-II
(A) Gaining Ratio	(I) An advantage of good name, reputation and wide business connections.
(B) New Profit Sharing Ratio	(II) The ratio in which the continuing partners have acquired the share from the retiring/deceased partner
(C) Sacrificing Ratio	(III) The ratio in which the remaining partners will share future profits after the retirement or death of any partner
(D) Goodwill	(IV) The ratio in which the old partners agree to sacrifice their share of profit in favour of the incoming partner

Particulars	Dr. Amount	Cr. Amount
Barun's Capital A/c Dr.	45,000
Chaitnaya's Capital A/c Dr.	45,000
To Arun's Capital A/c		90,000

Particulars	Dr. Amount	Cr. Amount
Barun's Capital A/c Dr.	60,000
Chaitnaya's Capital A/c Dr.	30,000
To Arun's Capital A/c		90,000

Particulars	Dr. Amount	Cr. Amount
Arun's Capital A/c Dr.	90,000
To Barun's Capital A/c		60,000
To Chaitnaya's Capital A/c		30,000

Arun, Barun and Chaitanya are partners in a firm sharing profits in the ratio of 3:2:1. Arun retired and the value of goodwill of the firm is valued at Rs. 1,80,000. Barun and Chaitanya continue sharing business profits in the ratio of 2:1. The journal entry for adjustment of goodwill will be:

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