Chapter 4 – Change In Profit Sharing Ratio Among The Existing Partners – TS Grewal 2022
Question 7
Mandeep Vinod and Abbas are partners sharing profits and losses in the ratio of 3 : 2 : 1. From 1st April, 2022, they decided to share profits and losses equally. The Partnership Deed provides that in the event of any change in the profit-sharing ratio, the goodwill shall be valued at three years purchase of the average profit of last five years . The profits and losses of the past five years are:
Profit – Year ended 31st March, 2018 – ₹1,00,000; 2019 – ₹1,50,000; 2021 – ₹2,00,000; 2022 – ₹2,00,000;
Loss – Year ended 31st March, 2020 – ₹50,000.
Pass the journal entries showing the working.
Solution:
Mandeep Vinod and Abbas are partners
