Ownclasses

Kavi, Ravi, Kumar and Guru were partners in a firm sharing profits in the ratio of 3:2:2:1. On 1.2.2017, Guru retired and the new profit sharing ratio decided between Kavi, Ravi and Kumar was 3:1:1. On Guru’s retirement the goodwill of the firm was valued at ₹ 3,60,000.
Showing your working notes clearly, pass necessary journal entry in the books of the firm for the treatment of goodwill on Guru’s retirement.

Answer
Kavi, Ravi, Kumar and Guru were partners in a firm sharing profits in

Working Note:
Gaining Ratio = New Ratio - Old Ratio
Kavi
   equals space 3 over 5 minus 3 over 8
equals space fraction numerator 24 minus 15 over denominator 40 end fraction
equals space 9 over 40
Ravi
   equals space 1 fifth minus 2 over 8
equals space fraction numerator 8 minus 10 over denominator 40 end fraction
equals space minus 2 over 40 left parenthesis sacrificing right parenthesis

Kumar
equals space 1 fifth minus 2 over 8
equals space fraction numerator 8 minus 10 over denominator 40 end fraction
equals space minus 2 over 40 left parenthesis sacrificing right parenthesis
Goodwill valued = ₹ 3,60,000
Kavi
   equals space 3 comma 60 comma 000 space cross times space 9 over 40 space equals space ₹ 81 comma 000
Ravi
   equals space 3 comma 60 comma 000 space cross times space 2 over 40 space equals space ₹ space 18 comma 000
Kumar
equals space ₹ space 3 comma 60 comma 000 space cross times space 2 over 40 space equals space ₹ space 18 comma 000
Guru
  equals space ₹ space 3 comma 60 comma 000 space cross times space 1 over 8 space equals space ₹ space 45 comma 000