X, Y and Z are in partnership sharing profits in the proportion of 3 : 2 : 1. There is no goodwill A/c in the books of the firm. As from 1st April, 2023, it was agreed that X should give only part of time

X, Y and Z are in partnership sharing profits in the proportion of 3 : 2 : 1. There is no goodwill A/c in the books of the firm. As from 1st April, 2023, it was agreed that X should give only part of time, to the business and that in consequence he should received in future only one half of his previous share, the remaining half being divided equally between Y and Z. The goodwill to be valued for this purpose, at ₹ 40,000.

Show the new share of partners and pass necessary journal entry.

[Ans. New profit sharing ratio of X, Y and Z will be 6 : 11 : 7 respectively.