28:- Pinky and Rocky are partners in a firm sharing profit in the ratio of 3 : 2. Their Balance Sheet as at 31st March 2025 was as follows:
Goodwill of the firm is valued at Rs 36,000 and the building at Rs 90,000 on 31st March, 2024. The partners decide to share profits equally with effect from 1st April, 2024.
Pass the necessary accounting entries without affecting the existing figure of building.
Solution:-
WORKING NOTES :-
(a) Calculation of gaining and sacrificing share
Old ratio = 3:2
New ratio = 1:1
Pinky = 3/5 – 1/2 = 1/10 (sacrifice)
Rocky = 2/5 – 1/2 = -1/10 (gain)
(b) Calculation of revaluation profit
Rise in building (90,000 – 72,000) 18,000
Revaluation profit 18,000
Calculation of partner’s share in revaluation profit
Pinky = 18,000 x 1/10 = Rs1,800 (credit)
Rocky = 18,000 x 1/10 = Rs 1,800 (debit)
(c) Calculation of partner’s share in goodwill
Goodwill of the firm = Rs 36,000
Pinky’s share in goodwill = 36,000 x 1/10 = Rs 3,600 (credit)
Rocky’s share in goodwill = 36,000 x 1/10 = Rs 3,600 (debit)