What is the accounting effect for the goodwill premium paid privately by the new partner?
Answers
Answered by
36
Answer:
1] Premium Method
Under this method, when the incoming partner brings his share of goodwill in cash, the existing partners share it in the sacrificing ratio. However, when the amount of goodwill is paid privately by the new partner to old partners privately in cash, no entry is passed in the books of the firm.
Similar questions