X, Y and Z who are presently sharing profits and losses in the ratio of 5 : 3 : 2 decide to share future profits & losses equally with effect from 1st April, 2023.
X, Y and Z who are presently sharing profits and losses in the ratio of 5 : 3 : 2 decide to share future profits & losses equally with effect from 1st April, 2023.
Goodwill of the firm is valued at ₹ 1,80,000. Goodwill already exists in the books at ₹ 30,000.
Pass the necessary Journal entries for the adjustment of Goodwill by raising and writing it off.
Anurag Pathak Changed status to publish May 7, 2023
Journal Entry of Goodwill appears in the books
Goodwill appeared in the books is written off in the old ratio.
X’s Capital A/c Dr. ₹ 15,000
Y’s Capital A/c Dr. ₹ 9,000
Z’s Capital A/c Dr. ₹ 6,000
To Goodwill A/c 30,000
Journal Entry of Self-Generated Goodwill by raising and writing it off.
Goodwill A/c Dr. 1,80,000
To X’s Capital A/c 90,000
To Y’s Capital A/c 54,000
To Z’s Capital A/c 36,000
(Goodwill raised and credited to Partner’s Capital Accounts in old
profit sharing ratio)
X’s Capital A/c Dr. 60,000
Y’s Capital A/c Dr. 60,000
Z’s Capital A/c Dr. 60,000
TO Goodwill A/c 1,80,000
(Goodwill written off by debiting to Partners Capital Accounts
in new profit sharing ratio)
Anurag Pathak Changed status to publish May 12, 2023
