Harpal, Ranjit and Manjit were partners sharing profits and losses in the ratio of 4 : 3 : 1. They close their books of account every year on 31st March. Ranjit died on 30th September, 2022. The firm’s profits for the previous years ended 31st March, were:

Year Profit (₹)
2017-18 3,50,000
2018-19 3,00,000
2019-20 1,10,000
2020-21 90,000 (Loss)
2021-22 1,60,000

Harpal and Manjit decided to share future profits in the ratio of 3 : 2.

Goodwill is to be valued on the basis of 2 year’s purchase of average profit of 4 completed years preceding the year of death of a partner.

Pass Journal entry to record Ranjit’s share of Goodwill.

Anurag Pathak Changed status to publish February 12, 2024
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