20 :- Shivam, Kapil and Deepak are partners sharing profits in the ratio of 3:1:2. On 31st march 2024, Kapil retired and his capital account after adjustments of reserves and profit on revaluation was Rs 3,50,000. Shivam and Deepak paid him Rs 4,20,000 in settlement of his claim. To settle his account, a computer of Rs 4,20,000 was given to Kapil. Pass the necessary journal entries in the books of the firm.
Solution :-
WORKING NOTES :-
(a) Calculation of Kapil’s share of goodwill
Amount to be paid to him 4,20,000
Less: Kapil’s capital after adjustment (3,50,000)
HIDDEN GOODWILL OF KAPIL 70,000
(b) Calculation of their share of goodwill
Shivam = 70,000 x 3/5 = Rs 42,000
Deepak = 70,000 x 2/5 = Rs 28,000