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Reconstitution of a Partnership Firm – Retirement/Death of a Partner · Class 12 · CBSE · Commerce Accountancy

A, B and C are equal partners. B retires, and A and C agree to share future profits in the ratio 3:2. The firm's goodwill is valued at ₹1,50,000. Whi…

Practice question from Reconstitution of a Partnership Firm – Retirement/Death of a Partner (Class 12 · CBSE · Commerce Accountancy), with the correct answer and a step-by-step solution.

hard · MCQ · Q-854922

A, B and C are equal partners. B retires, and A and C agree to share future profits in the ratio 3:2. The firm's goodwill is valued at ₹1,50,000. Which journal entry correctly records the adjustment for B's share of goodwill without opening a Goodwill Account?

  1. A.A's Capital A/c Dr. ₹40,000 and C's Capital A/c Dr. ₹10,000; To B's Capital A/c ₹50,000Correct answer
  2. B.B's Capital A/c Dr. ₹50,000; To A's Capital A/c ₹40,000 and C's Capital A/c ₹10,000
  3. C.A's Capital A/c Dr. ₹30,000 and C's Capital A/c Dr. ₹20,000; To B's Capital A/c ₹50,000
  4. D.Goodwill A/c Dr. ₹1,50,000; To A's Capital A/c ₹90,000 and C's Capital A/c ₹60,000

Solution

B's share of goodwill is ₹1,50,000 × 1/3 = ₹50,000. A's gain is 3/5 − 1/3 = 4/15 and C's gain is 2/5 − 1/3 = 1/15, so they bear the goodwill compensation in the ratio 4:1: ₹40,000 and ₹10,000 respectively.

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