X, Y and Z were partners in a firm sharing profit in the ratio of 3 : 2 : 1. The firm closes its books on 31st March every year. Y died on 30th June, 2023. On Y’s death, goodwill of the firm was valued at ₹ 60,000. Y’s share in the profit of the firm till the date of his death was to be calculated on the basis of previous year’s profit which was ₹ 1,50,000. Pass necessary Journal entries for goodwill and Y’s share at the time of his death.

[Ans.: Gaining Ratio – 3 : 1; Y’s share of Goodwill – ₹ 20,000; Y’s share of Profit – ₹ 12,500. Journal Entry for Goodwill: Dr. X’s Capital A/c by ₹ 15,000 and Z’s Capital A/c by ₹ 5,000; Cr. Y’s Capital A/c by ₹ 20,000. For Share of Profit: Dr. Profit & Loss Suspense A/c and Cr. Y’s Capital A/c by ₹ 12,500.]

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