(a) Naresh, Mani and Muthu are partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. On 31st March 2019, Muthu retires from the firm. On the date of Muthu's retirement, goodwill appeared in the books of the firm at ₹ 40,000. By assuming fluctuating capital method, pass the necessary journal entries if the partners decide to : (i) Write off the entire amount of existing goodwill. (ii) Write off half of the amount of existing goodwill. OR (b) Calculate trend percentages from the following particulars of Kurinji Ltd. | Particulars | 2015-16 (₹ in Thousands) | 2016-17 (₹ in Thousands) | 2017-18 (₹ in Thousands) | | --- | --- | --- | --- | | Revenue from operations | 120 | 132 | 156 | | Other income | 50 | 38 | 65 | | Expenses | 100 | 135 | 123 |

> > [!TLDR] > (a) Write off existing goodwill against all partners in the old ratio 2:2:1 — full ₹40,000 or half ₹20,000. (b) Base = 2015-16 (100%); trend % for each line computed as figure ÷ base × 100. > > ## (a) Naresh, Mani, Muthu (2:2:1) — writing off existing goodwill on Muthu's retirement > > Goodwill already appearing in the books is a fictitious asset that must be written off among ALL partners in the OLD profit-sharing ratio (2:2:1, total 5). Under the fluctuating capital method the write-off is posted directly to the capital accounts. > > **(i) Write off the entire existing goodwill of ₹40,000** > > | Particulars | L.F. | Dr (₹) | Cr (₹) | > | --- | --- | --- | --- | > | Naresh's Capital A/c Dr (40,000 × 2/5) | | 16,000 | | > | Mani's Capital A/c Dr (40,000 × 2/5) | | 16,000 | | > | Muthu's Capital A/c Dr (40,000 × 1/5) | | 8,000 | | > | To Goodwill A/c | | | 40,000 | > | (Being existing goodwill written off fully in the old ratio 2:2:1) | | | | > > **(ii) Write off half the existing goodwill = ₹20,000** > > | Particulars | L.F. | Dr (₹) | Cr (₹) | > | --- | --- | --- | --- | > | Naresh's Capital A/c Dr (20,000 × 2/5) | | 8,000 | | > | Mani's Capital A/c Dr (20,000 × 2/5) | | 8,000 | | > | Muthu's Capital A/c Dr (20,000 × 1/5) | | 4,000 | | > | To Goodwill A/c | | | 20,000 | > | (Being half of the existing goodwill written off in the old ratio 2:2:1) | | | | > > ## (b) Trend percentages for Kurinji Ltd. (base year 2015-16 = 100) > > Trend % = (year's figure ÷ 2015-16 figure) × 100. > …

(a) Naresh, Mani and Muthu are partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. On 31s

Question 21 of 35

Naresh, Mani and Muthu are partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. On 31st March 2019, Muthu retires from the firm. On the date of Muthu's retirement, goodwill appeared in the books of the firm at ₹ 40,000. By assuming fluctuating capital method, pass the necessary journal entries if the partners decide to :
1. Write off the entire amount of existing goodwill.
2. Write off half of the amount of existing goodwill. OR
Calculate trend percentages from the following particulars of Kurinji Ltd.

Particulars	2015-16 (₹ in Thousands)	2016-17 (₹ in Thousands)	2017-18 (₹ in Thousands)
Revenue from operations	120	132	156
Other income	50	38	65
Expenses	100	135	123

Puducherry TnboardTamil Nadu HSC (DGE) Commerce Board 2023Subjective· 5mImportance★★★★★

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(a) Write off existing goodwill against all partners in the old ratio 2:2:1 — full ₹40,000 or half ₹20,000. (b) Base = 2015-16 (100%); trend % for each line computed as figure ÷ base × 100.

(a) Naresh, Mani, Muthu (2:2:1) — writing off existing goodwill on Muthu's retirement

Goodwill already appearing in the books is a fictitious asset that must be written off among ALL partners in the OLD profit-sharing ratio (2:2:1, total 5). Under the fluctuating capital method the write-off is posted directly to the capital accounts.

(i) Write off the entire existing goodwill of ₹40,000

Particulars	Dr (₹)	Cr (₹)
Naresh's Capital A/c Dr (40,000 × 2/5)	16,000
Mani's Capital A/c Dr (40,000 × 2/5)	16,000
Muthu's Capital A/c Dr (40,000 × 1/5)	8,000
To Goodwill A/c		40,000
(Being existing goodwill written off fully in the old ratio 2:2:1)

(ii) Write off half the existing goodwill = ₹20,000

Particulars	Dr (₹)	Cr (₹)
Naresh's Capital A/c Dr (20,000 × 2/5)	8,000
Mani's Capital A/c Dr (20,000 × 2/5)	8,000
Muthu's Capital A/c Dr (20,000 × 1/5)	4,000
To Goodwill A/c		20,000
(Being half of the existing goodwill written off in the old ratio 2:2:1)

(b) Trend percentages for Kurinji Ltd. (base year 2015-16 = 100)

Trend % = (year's figure ÷ 2015-16 figure) × 100.

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(a) Naresh, Mani, Muthu (2:2:1) — writing off existing goodwill on Muthu's retirement

(b) Trend percentages for Kurinji Ltd. (base year 2015-16 = 100)

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