A,B,C were partners sharing profits in the ratio of 6:4:5.Their capital were A100,000,B 80,000,C 60,000.On 1st April 2009,B retried from the firm and the new profit sharing ratio between A and C was decided as 11:4.On Bretirement the g/w of the firm valued 180,000.Pass the necessary entries after B retirement.

  Journal Entry
Date Particulars L.F. Debit Amount
Credit Amount
  A’s Capital A/c (1,80,000*5/15) Dr.   60,000  
    To B’s Capital A/c (1,80,000*4/15)       48,000
   To C’s Capital A/c (1,80,000*1/15)       12,000
  (A compensate B for his share of goodwill and also compensate C, C is a sacrificing partner)        

Working Notes:
Old Ratio of A:B:C = 6:4:5
New Ratio of A:C = 11:4
Gaining Ratio = New Ratio - Old Ratio
A's Gaining Ratio = 11/15-6/15 = 5/15
C's Gaining Ratio = 4/15-5/15 = 1/15 (Sacrifice)

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