Tvisha and Divya were partners in a firm carrying on a tiffin service in Hyderabad. Divya noticed that a lot of food is left at the end of the day. To avoid wastage, she suggested that the same may be distributed among the needy. Tvisha wanted it to be mixed with the food to be served the next day. Tvisha then gave a proposal that if her share in the profit is increased, she will not mind free distribution of left over food. Divya happily agreed. So, they decided to change their profit sharing ratio to 3 : 2 with immediate effect. On the date of change in the profit-sharing ratio, the goodwill of the firm was valued at Rs.  50,000.

(a) Pass the necessary adjustment entry for the treatment of goodwill.

(b) State any two values highlighted in the behavior of Tvisha and Divya.

Marks-4, CBSE:2016-17/Comp-DL/Q-11

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