Hanny, Pammy and Sunny are partners sharing profits in the ratio of `3 : 2 : 1`. Goodwill is appearing in the books at a value of Rs. 60,000. Pammy retires and at the time of Pammy's retirement, goodwill is valued at Rs. 84,000. Hanny and Sunny decided to share future profits in the ratio of `2:1`. Record the necessary journal entries.

Explanation

Working Notes
(i) Pammy's share of current value of goodwill `(1)/(3)` of Rs. 84,000
`=84,000 xx (1)/(3)` = Rs. 28,000
Retirement/Death of a Partner
(ii) Gaining Share = New Share - Old Share
Hanny's Gaining Share = `(2)/(3)-(3)/(6)=(1)/(6)`
Sunny's Gaining Share = `(1)/(3)-(1)/(6)=(1)/(6)`
This gaining Ratio of Hanny and Sunny is `(1)/(6):(1)/(6)=1:1`