Naman, Aman and Raman are partners sharing profits and losses in the ratio of 2 : 2 : 1. From 1st April 2023, they decide to change the profit-sharing ratio. They pass the following adjustments entry for goodwill in the books:
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A, B and C shared profits and losses in the ratio of 3 : 2 : 1 respectively. With effect from 1st April, 2023, they agreed to share profits equally. The goodwill of the firm was valued at ₹ 18,000.
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Hari, Ram and Shyam who were sharing profits and losses in the ratio of 5 : 3 : 2, decide to share future profits and losses in the ratio of 2 : 2 : 1. Goodwill of the firm is valued at ₹ 1,00,000. Goodwill existing in the books is ₹ 40,000. Show the necessary accounting treatment by raising Goodwill Account.
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Arun, Varun and Tarun are partners sharing profits and losses in the ratio of 3 : 2 : 1. They decide to share profit and losses equally with effect from 1st April 2023. Goodwill of the firm is valued at ₹ 1,20,000. Pass Journal entries when goodwill is raised and written off.
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A and B are partners in a firm sharing profits in the ratio of 2 : 1. They decided that with effect from 1st April 2022, they would share profits in the ratio of 3 : 2. But, this decision was taken after the profit for the year ended 31st March 2023 of ₹ 90,000 was distributed in the old profit sharing ratio.
Solution:- Working Notes:-
Ram, Laxman, and Bharat who were sharing profits and losses in the ratio of 5 : 3 : 2, decide to share profits and losses equally with effect from 1st April, 2023. The goodwill of the firm is valued at ₹ 4,50,000. Goodwill is appearing in the books is at ₹ 75,000. Pass necessary Journal entries to record the above change.
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Ash, Nisha, and Disha shared profits and losses in the ratio of 3 : 2 : 1 respectively. With effect from 1st April 2023, they agreed to share profits equally. The goodwill of the firm was valued at ₹ 18,000. Pass necessary Journal entries to record the above change.
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X, Y and Z are partners sharing profits and losses in the ratio of 5 : 3 : 2. From 1st April 2023, they decided to share profits and losses equally. The Partnership Deed provides that in the event of any change in the profit sharing ratio, goodwill is to be valued at two years’ purchase of the average profit of the preceding five years. The Profits and losses of the preceding years ended 31st March are:
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Pranav, Karan, and Rahim are partners sharing profits and losses in an agreed ratio. With effect from 1st April 2023, they agreed to share profit in the ratio of 3 : 3 : 4. To arrive at the new ratio, Rahim takes 1/5th share equally from Pranav and Karan. Calculate the old profit-sharing ratio.
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A, B, and C are partners sharing profits and losses in the ratio of 5 : 4 : 1. Calculate the new profit sharing ratio, sacrificing ratio, and gaining ratio in each of the following cases:
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