A, B and C are sharing profits in the ratio of 4 : 3 : 2. Goodwill is appearing in the books at a value of ₹ 42,000. C retires and on the day of C’s retirement Goodwill is valued at ₹ 63,000

A, B and C are sharing profits in the ratio of 4 : 3 : 2. Goodwill is appearing in the books at a value of ₹ 42,000. C retires and on the day of C’s retirement Goodwill is valued at ₹ 63,000. Pass the necessary Journal entries.

[Ans. (i) Goodwill of ₹ 42,000 will be written off in 4 : 3 : 2; (ii) C’s share of Goodwill of ₹ 63,000 i.e., ₹ 14,000 will be adjusted into the Capital A/cs of A and B in gaining ratio of 4 : 3.]