The partners of ABC Partnership share profits
and losses in the ratio A: 50% B 25% and C 25%. On 1 January 2022, C withdraws
from the partnership and a new partner D is admitted to the partnership. A, B
and D agree to share profits and losses in the ratio A: 40% B 30% and C 30%.
Goodwill amounting to $50,000 is to be recorded in the books on the day C
retires. The partners (A, B and D) in the new partnership do not wish to
maintain a goodwill account and the goodwill is to be written off. The journal
entry to create and write-off goodwill are

Question

Answer

Debit Goodwill                                 50,000

Credit Current Account A               25,000

Credit Current Account B              12,500

Credit Current Account C              12,500

Debit Current Account A                 20,000

Debit Current Account B               15,000

Debit Current Account C               15,000

Credit Goodwill                               50,000

Answer

Debit Goodwill                                 50,000

Credit Capital Account A                 25,000

Credit Capital Account B               12,500

Credit Capital Account D               12,500

Debit Capital Account A                  20,000

Debit Capital Account B                15,000

Debit Capital Account C                15,000

Credit Goodwill                               22,000

Answer

Debit Goodwill                                 50,000

Credit Capital Account A                 25,000

Credit Capital Account B               12,500

Credit Capital Account C               12,500

Debit Capital Account A                  25,000

Debit Capital Account B                12,500

Debit Capital Account C                12,500

Credit Goodwill                               50,000

Answer

Debit Goodwill                                 50,000

Credit Current Account A               25,000

Credit Current Account B              12,500

Credit Current Account C              12,500

Debit Current  Account A                20,000

Debit Capital Account B                15,000

Debit Capital Account D                15,000

Credit Goodwill                               50,000

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