X, Y and Z were partners in a firm sharing profits in the ratio of 4 : 3 : 1. The firm closes its books on 31st March every year. On 1st February 2018, Y and it was decided that the new profitsharing ratio between X and Z will be equal. Partnership Deed provided for the following on the * of a partner:
(a) His share of goodwill be calculated on the basis of half of the profits credited to his account during the previous four completed years. The firm’* profits for the last four years were:
(b) His share of profit in the year of his **** was to be computed on the basis of average profit of past two years. Pass necessary journal entries realting to goodwill and profit to be transferred to Y’ Capital Account.
