Partners A and B share profits in the ratio $3:2$. Partner B retires. The firm's net assets before retirement are Rs. $5,00,000$ and goodwill is valued at Rs. $80,000$. Goodwill is to be written off in the sacrificing ratio of the remaining partner A (i.e., $3:2$). Calculate the amount of goodwill that should be paid to retiring partner B.

Step-by-step solution

1. Determine B's share in the original profit‑sharing ratio: $\frac{2}{3+2}=\frac{2}{5}$.
2. Multiply B's share by the total goodwill: $\frac{2}{5}\times 80,000=32,000$.
3. Since only goodwill is asked for, the amount payable to B is Rs. $32,000$.

Concept tested: Retirement – goodwill settlement

Published 28 September 2026 · How this solution was prepared and checked