Question

If the new partner brings his share of goodwill in cash, it will be shared by old partners in

(A) Ratio of sacrifice

(B) Old profit sharing ratio

(C) New profit sharing ratio

(D) In Capital ratio

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Answer 1

Answer:

ratio of sacrifice

Explanation:

because when new partner is admitted old partner has to sacrifice their profit ratio so in order to compensate old partner divide goodwill in their sacrificing ratio

Answer 2

If the new partner brings his share of goodwill in cash, it will be shared by old partners in  Ratio of sacrifice (A)

Explanation:

• A ratio in which the old partners of a partnership firm surrender their share of profit in favour of the new partner/s is called sacrificing ratio.
• Formula for sacrificing ratio is,
• Sacrificing ratio = Old profit sharing ratio – New profit sharing ratio
• Premium method is used by the new partner to bring cash for his share of goodwill and the same is shared by the old partners in their sacrificing ratio.