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Question
Rajan, Suman and jegan were partners in firm sharing profits and losses in the ratio of 4:3:2 Suman retired from partnership. The goodwill of the firm on the date of retirement was valued at ₹ 45,000. Pass necessary journal entries for goodwill on the assumption that the fluctuating capital method is followed.
Solution
Suman's share of goodwill = `45,000 xx 3/9` = Rs. 15,000
Gaining Ratio (in old ratio) = Rajan : jegan = 4 : 2
Rajan = `3/9 xx 4/6 = 12/54`
Jegan = `3/9 xx 2/6 = 6/54`
Gain Ratio = 12 : 6 or 2 : 1
| Particulars | L.F. | Debit | Credit |
| Rajan Capital A/c Dr. Jegan's Capital A/c Dr. To Suman's Capital A/c [Suman's share of goodwill is adjusted in gaining ratio] |
10,000 5,000 |
15,000 |
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