Question : M, N and O are partners in a firm sharing profits in the ratio of 3: 2: 1. Goodwill has been valued at Rs. 60,000. On N's retirement M and O agree to share profits equally. Amount credited to M's capital account will be:
Option 1: Credited M's capital account by Rs 10,000
Option 2: Debited M's capital account by Rs 10,000
Option 3: Credited M's capital account by Rs 20,000
Option 4: None of the above
Answer (1)
9th Jan, 2024
Correct Answer: Debited M's capital account by Rs 10,000
Solution :
Answer =
Debited M's capital account by Rs 10,000
N's Share of goodwill= $60,000 \times \frac{2}{6}=20,000$
M's Capital debited by= $20,000 \times \frac{3}{6}=10,000$
Hence, the correct option is 2.
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