28 :- Asha, Naveen and Shalini were partners in a firm sharing profits in the ratio of 5:3:2. Goodwill appeared in their books at a value of Rs 80,000 and General Reserve at Rs 40,000. Naveen decided to retire from the firm. On the date of his retirement, goodwill of the firm was valued at Rs 1,20,000. The new profit–sharing ratio decided among Asha and Shalini is 2:3.
Record the necessary Journal entries on Naveen’s retirement.
Solution :-
WORKING NOTES :-
(a) Calculation of gaining/sacrificing share of partners
New ratio – old ratio
Asha = 2/5 – 5/10 = -1/10 (sacrifice)
Shalini = 3/5 – 2/10 = 4/10 ( gain)
(b) Calculation of share of goodwill
Naveen = 1,20,000 x 3/10 = Rs 36,000 (credit)
Asha = 1,20,000 x 1/10 = Rs 12,000 (credit)
Shalini = 1,20,000 x 4/10 = Rs 48,000 (debit)