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 share 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 Rs.50,000, Rs.55,000 and Rs.60,000 respectively. The normal profits for the similar firm are Rs.30,000. Goodwill already in the books of the firm at Rs.75,000. The profit for the first year after Bhim's retirement was Rs.1,00,000. Give the necessary Journal Entries to adjust Goodwill and distribute profits showing your workings clearly.

Ram, Laxman and Bharat are partners sharing profits in the ratio of 3:2:1. Goodwill is appearing in the books at a value of Rs.1,80,000. Laxman retires and at the time of his retirement, goodwill is valued at Rs.2,52,000. Ram and Bharat decided to share future profits in the ratio of 2:1. The profits for the first year after Laxman's retirement amount to Rs.1,20,000. Give the necessary Journal Entries to record goodwill and to distribute the profits. Show your calculations clearly.

The Balance Sheet of Keshav, Nirmal and pankaj who are partners in a firm sharing profits according to their capital as at 31st March, 2012 was as follows:

On that date Nirmal decided to retire from the firm and was paid for his share in the firm subject to the following:
(i) Buildings to be appreciated by 20%.
(ii) Provision for Bad Debts to be increased to 15% on Debtors.
(iii) Machinery to be depreciated by 20 %.
(iv) Goodwill of the firm is valued at Rs.1,44,000 and the retiring partner's share is adjusted through the capital accounts of  remaining partners.
(v) The capital of the new firm be fixed at 2,40,000.
Prepare Revaluation Account, Capital Accounts of the partners, Bank Account and the Balance Sheet after Nirmal's retirement.

Sandeep, Praveen and Tara are partners sharing profits in the ratio of 3:2:1. On 1st April, 2012  Sandeep gave a notice to retire from the firm. Praveen and Tara after all adjustments showed a balance of Rs.64,000 and Rs.1,00,000 respectively. The total amount to be paid to Sandeep was Rs.1,23,000. This amount was to be paid by Praveen and Tara in such a way Pass necessary Journal entires for the above transations in the books of the firm. Show your working clearly.

Why heirs of a retiring/deceased partner are entitled to a share of goodwill of the firm ?

What is the need for treatement of goodwill on the death of a partner ?

Give the journal entry to distribute workman compensation reserve of Rs.60,000 at the time of retirement of Sajjan, when there is no claim against it.The firm three partners Rajat, Sajjan and Kavita.