A, B and C are partners sharing profits in the ratio of 5 : 3 : 2. It is now agreed that they will share profits in the ratio of 5 : 4 : 3. Goodwill is valued at Rs. 1 ,20,000. Pass a single journal entry for the treatment of goodwill.

Explanation

Debit B by Rs. 4,000 and C by Rs. 6,000, Credit A by Rs. 10,000.