Question : A, B and C are equal partners. They decided to change the profit sharing ratio 4:3:2. For this purpose, the goodwill of the firm is valued at Rs 90,000. The journal entry for the treatment of goodwill on change in profit sharing ratio will be
Option 1: C’s capital A/c Dr 10,000
To A’s capital A/c 10,000
Option 2: B’s capital A/c Dr 10,000
To A’s capital A/c 10,000
Option 3: A’s capital A/c Dr 90,000
To C's capital A/c 90,000
Option 4: A;s capital A/c Dr 10,000
To C’s capital A/c 10,000
Correct Answer: A;s capital A/c Dr 10,000
To C’s capital A/c 10,000
Solution : Answer =
A's Capital A/c Dr 10,000
To C’s Capital A/c 10,000
SR= OR-NR
A 1/3- 4/9= -1/9 gain
B 1/3-3/9= zero
C 1/3- 2/9= 1/9 sacrifice
Hence, the correct option is 4.
Related Questions
Trending Articles/News
