Question

How will you deal with goodwill when there is change in profit-sharing ratio among the existing partners ?​

Answer 1

WHEN GOODWILL IS ADJUSTED Through partners capital accounts :

1. Gaining partners capital A/C. Dr.
To sacrificing partners cap. A/C

WHEN GOODWILL IS RAISED AND WRITTEN OFF

1. Goodwill A/C. Dr. ( In old PSR)
To Partners Capital A/C
2. Partners capital A/C. Dr. (In newPSR)
To Goodwill A/C

Answer 2

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