Question : R, B and L were partners in a firm sharing profits and losses in the ratio of equally. With effect from 1st April, 2018 they decided to share future profits and losses in the ratio of 3:2:1. On that date their Balance Sheet showed a debit balance of Rs. 24,000 in Profit and Loss Account and a balance of Rs. 1,44,000 in General Reserve.
It was also agreed that:
(a) The goodwill of the firm be valued at Rs. 1,80,000.
(b) The Land (having book value of Rs. 3,00,000) will be valued at Rs. 4,80,000.
Adjustment entry for goodwill is?
Option 1: Debited R by Rs 30,000 and credited B Rs 30,000
Option 2: Debited R by Rs 30,000 and credited L Rs 30,000
Option 3: Debited R by Rs 30,000 and debited L Rs 20,000 and Debited B by Rs 10,000
Option 4: None of these
Correct Answer: Debited R by Rs 30,000 and credited L Rs 30,000
Solution : Answer = Debited R by Rs 30,000 and credited L Rs 30,000
S.R. = O.R. - N.R.
R = 1/3 - 3/6 = 2-3/6 = -1/6 x 1,80,000 = 30,000
B = 1/3 - 2/6 = 2-2/6 = 0
R = 1/3 - 1/6 = 2-1/6 = 1/6 x 1,80,000 = 30,000
R's Capital A/c Dr 30,000
To L's Capital A/c 30,000
Hence, the correct option is 2.
