# X and Y shared profits and losses in the ratio of 3 : 2. With effect from 1st April 2023, they decided to share profits equally. The goodwill of the firm was valued at ₹ 60,000. The adjustment entry will be:

**X and Y shared profits and losses in the ratio of 3 : 2. With effect from 1st April 2023, they decided to share profits equally. The goodwill of the firm was valued at ₹ 60,000. The adjustment entry will be:**

a) Dr. Y’s Capital A/c and Cr. X’s Capital A/c by ₹ 6,000

b) Dr. X’s Capital A/c and Cr. Y’s Capital A/c by ₹ 6,000

c) Dr. X’s Capital A/c and Cr. Y’s Capital A/c by ₹ 600

d) Dr. Y’s Capital A/c and Cr. X’s Capital A/c by ₹ 600

Ans – a)

**Explanation:-**

Calculation of Gain/sacrifice of partners

X = 3/5 – 1/2 = 6 – 5/10 = 1/10 (Sacrifice)

Y = 2/5 – 1/2 = 4 – 5/10 = – 1/10 (gain)

Calculation of partners’ share in the goodwill

Goodwill of the firm ₹ 60,000

X’s share in goodwill = 60,000 × 1/10 = ₹ 6,000 (Credit)

Y’s share in goodwill = 60,000 × 1/10 = ₹ 6,000 (Debit)

**Journal Entry**

Y’s Capital A/c Dr. 6,000

To X’s Capital A/c 6,000