A, B, C and D are partners sharing profits in the ratio of 5 : 3 : 3 : 1. On the retirement of C, goodwill was valued at ₹ 3,60,000. C’s share of goodwill will be adjusted into the Capital accounts of A, B and D

A, B, C and D are partners sharing profits in the ratio of 5 : 3 : 3 : 1. On the retirement of C, goodwill was valued at ₹ 3,60,000. C’s share of goodwill will be adjusted into the Capital accounts of A, B and D. Pass necessary entry for the treatment of goodwill when new profit sharing ratio is decided at 9 : 2 : 1.

[Ans. Only A gains 4/12. B has also sacrificed 1/12. Hence A will be debited by ₹ 1,20,000 and B and C will be credited by ₹ 30,000 and ₹ 90,000 respectively.]