QUESTION 7

7. X, Y and Z are partners sharing profit in the ratio of 4 : 3 : 2. Y retires and his capital after making adjustments for 
reserves and profits on  revaluation stands at Rs 95,000. X and Z agreed to pay him some amount in full settlement of his claim. The Journal entry for the adjustment of goodwill is given below:

Calculate the amount agreed to be paid to Y and new profit-sharing ratio of X and Z. 

Dear Student


From the Journal entry we can see that Goodwill is adjusted in the ratio of 13:11 (3,900 : 3,300) .
This means Gaining ratio of X and Z is 13:11 .

New PSR 

X = Old Ratio + Gaining Ratio = 49+1324 = 213216
Z = Old Ratio + Gaining Ratio = ​29+1124 = 147216
New PSR between X and X = 213 : 147 or 71:49 .


Y will be paid his share of capital and his share of goodwill i.e. 95,000+7,200​ = 1,02,200/-



Regards
 

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