K, N and P are partners sharing profits and losses in the ratio of 4 : 3 : 2 . N retires and the goodwill is valued at Rs. 72,000 . K and P decided to - Accountancy MCQ CUET Accountancy 2025 27 May Shift 2 2026 | ExamTest.live

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K, N and P are partners sharing profits and losses in the ratio of 4 : 3 : 2 . N retires and the goodwill is valued at Rs. 72, 000 . K and P decided to share future profits and losses in the ratio of 5 : 3 . Identify the correct journal entry in this scenario.

A $K's Capital A/c Dr. 13,000P's Capital A/c Dr. 11,000To N's Capital A/c 24,000$
B $K's Capital A/c Dr. 12,000P's Capital A/c Dr. 10,000To N's Capital A/c 22,000$
C $K's Capital A/c Dr. 14,000P's Capital A/c Dr. 12,000To N's Capital A/c 26,000$
D $K's Capital A/c Dr. 15,000P's Capital A/c Dr. 13,000To N's Capital A/c 28,000$

Solution & Step-by-step Explanation

Step 1: Calculate N's share of goodwill.Total goodwill of the firm = Rs. 72, 000 Old profit sharing ratio of K, N, P = 4 : 3 : 2 N's share = \frac{3}{9} N's share of goodwill = 72, 000 \times \frac{3}{9} = Rs. 24, 000 Step 2: Calculate the Gaining Ratio of continuing partners (K and P). Gaining Ratio = New Ratio - Old Ratio For K: Gain of K = \frac{5}{8} - \frac{4}{9} = \frac{45 - 32}{72} = \frac{13}{72} For P: Gain of P = \frac{3}{8} - \frac{2}{9} = \frac{27 - 16}{72} = \frac{11}{72} Gaining ratio between K and P = 13 : 11 Step 3: Compensation by gaining partners. K’s contribution = 24, 000 \times \frac{13}{24} = Rs. 13, 000 P’s contribution = 24, 000 \times \frac{11}{24} = Rs. 11, 000 Therefore, the journal entry is:K's Capital A/c Dr. 13,000P's Capital A/c Dr. 11,000To N's Capital A/c 24,000

Try it yourself before checking the explanation above.

K, N and P are partners sharing profits and losses in the ratio of 4 : 3 : 2 . N retires and the goodwill is valued at Rs. 72, 000 . K and P decided to share future profits and losses in the ratio of 5 : 3 . Identify the correct journal entry in this scenario.

K's Capital A/c Dr. 13,000P's Capital A/c Dr. 11,000To N's Capital A/c 24,000

K's Capital A/c Dr. 12,000P's Capital A/c Dr. 10,000To N's Capital A/c 22,000

K's Capital A/c Dr. 14,000P's Capital A/c Dr. 12,000To N's Capital A/c 26,000

K's Capital A/c Dr. 15,000P's Capital A/c Dr. 13,000To N's Capital A/c 28,000

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