Solution
Gaining ratio or sacrificing ration will be calculated as:
Gaining/Sacrificing Ratio = New Ratio – Old Ratio
Therefore:
For A = 1/3 – 3/6
= 2/6 – 3/6
= 1/6 Gaining Ratio
For B = 1/3 – 2/6
= 2/6 – 2/6
= No Change
For C = 1/3 – 1/6
= 2/6 – 1/6
= 1/6 Sacrificing Ratio
If no Goodwill account is not opened than an adjustment entry will be passed as under: Rs.18000 * 1/6 = Rs. 3000
C’s Capital Account Dr. 3000
To A’s Capital Account 3000
If Goodwill Account is opened, first goodwill account is created by crediting partners capital account in their old profit sharing ratios:
Goodwill Account Dr. 18000
To A’s Capital Account 9000
To B’s Capital Account 6000
To C’s Capital Account 3000
Than, Goodwill will be written off in the new profit sharing ratio:
A’s Capital Account Dr.6000
B’s Capital Account Dr. 6000
C’s Capital Account Dr. 6000
To Goodwill Account 18000