[DK Goel] Q. 21, 22 Retirement of Partner Solutions Class 12 CBSE (2026-27)
Here are the solutions of Question number 21 and 22 of Retirement of Partner chapter 5 of DK Goel Class 12 CBSE (2026-27)
Q. 21 (A). P, R and S are in partnership sharing profits 4/8, 3/8 and 1/8 respectively. It is provided under the partnership deed that on the death of any partner his share of goodwill is to be valued at one-half of the net profits credited to his account during the last 4 completed years (books of accounts are closed on 31st March).
R died on 1st April, 2022. The firm’s profits for the last 4 years were as follows: 2019 (Profits ₹ 1,20,000); 2020 (Profits ₹ 60,000); 2021 (Losses ₹ 20,000) and 2022 (Profits ₹ 80,000).
- Determine the amount that should be credited to R in respect of his share of goodwill.
- Pass journal entry for the adjustment of goodwill, assuming that profit sharing ratio between P and S in future will be 3 : 2. Show your working clearly.
[Ans. R’s share of goodwill ₹ 45,000; to be debited to P and S in the ratio of 4 : 11.]
Solution:-
Case – (1)
Case – (2)
Working Notes:-
Q. 21 (B). A, B, C and D are partners in a firm sharing profits and losses in the ratio o 2 : 2 : 1 : 1. A and C decided to retire from the firm. The goodwill of the firm was valued at ₹ 90,000. B and D decided to share future profits in the ratio of 5 : 3.
Pass necessary journal entry for the treatment of goodwill.
[Ans. Debit B by ₹ 26,250 and D by ₹ 18,750; and Credit A by ₹ 30,000 and C by ₹ 15,000.]
Solution:-
Q. 22. Arjun, Bhim and Nakul are partners sharing profits and losses in the ratio of 14 : 5 : 6 respectively. Bhim retires and surrenders his 5/25th shares in favour of Arjun. The goodwill of the firm is valued at 2 years purchase of super profits based on average profits of last 3 years. The profits for the last 3 years are ₹ 50,000, ₹ 60,000 and ₹ 55,000 respectively. The normal profits for the similar firm are ₹ 30,000. Goodwill aleardy appears in the books of the firm at ₹ 75,000. The profit for the first year after Bhim’s retirement was ₹ 1,00,000. Give the necessary journal entries to adjust Goodwill and to distribute profits showing your workings clearly.
Solution:-
