Tarun, Abhishek, Kamal and Vivek were partners in a firm sharing profits in the ratio of 5:3:2:2. Kamal retired on 31st March, 2022. Tarun, Abhishek and Vivek decided to share future profits equally. On Kaal’s retirement goodwill of the firm was valued at ₹9,00,000.

Showing your working clearly, pass the necessary journal entry for treatment of goodwill on Kamal’s retirement. It was decided not to show goodwill in the books of the firm.

Marks-3, CBSE:2022-23/Zone-5/Set-1/Q-19*