P,Q and R are partners sharing profits and losses in the ratio of 4:3:2 A retires , B and - Accountancy - Reconstitution- Retirement/Death of a Partner

Question

P,Q and R are partners sharing profits and losses in the ratio
of 4:3:2 A retires , B and C decided to share profits in future in
the ratio of 5:3 G/w of the firm 90,000 Pass journal entries

Komal Verma · Accepted Answer

Journal Date Particulars L F Debit Amount Rs Credit Amount Rs Qâ€™s Capital A/c Dr 26,250 Râ€™s Capital A/c Dr 13,750 To Pâ€™s Capital A/c 40,000 (Pâ€™s Share of goodwill adjusted) Working Notes: Old Ratio (P, Q and R) = 4 : 3 : 2 New Ratio (Q and R) = 5 : 3 Gaining Ratio = New Ratio â€“ Old Ratio

Gaining Ratio = 21 : 11 Goodwill of the firm = Rs 90,000 Pâ€™s Share of Goodwill

Pâ€™s share of goodwill will be debited to the continuing partners i e Q and R capital accounts in their gaining ratio Amount of Goodwill to be debited to: Qâ€™s Capital Account

Râ€™s Capital Account

Note: In the question, it has been assumed that P (instead of A) is retiring and Q and R (instead of B and C) decided to share profits in future in the ratio of 5 : 3

Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	Q’s Capital A/c	Dr.		26,250
	R’s Capital A/c	Dr.		13,750
	To P’s Capital A/c				40,000
	(P’s Share of goodwill adjusted)

P,Q and R are partners sharing profits and losses in the ratio of 4:3:2. A retires , B and C decided to share profits in future in the ratio of 5:3 . G/w of the firm 90,000. Pass journal entries.