Question

Goodwill already appearing in the books, should be written off among partners in their which ratio​

Answer 1

Answer:

If goodwill already appears in the books of old firm (before the admission of new partner), then this should be written off among the old partners in their old profit sharing ratio. The following Journal entry is passed. Old Partner's Capital A/c Dr.

Answer 2

Explanation:

In the ratio of 3:1, the remaining partners X and Z continue to share profits. Pass the journal entries under various alternatives: Raising the Goodwill to its full value and retaining it in the books. Raising the goodwill at full value and writing off immediately.

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