Why in hidden goodwill it is partners current account?
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Calculate hidden Goodwill. Solution: The Profit and loss a/c shows a credit balance of Rs. 8,000 as on date of admission of Z, being share of Z in the hidden goodwill is adjusted through capital accounts by crediting sacrificing partners in their sacrificing ratio.
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Sometimes the value of goodwill is not given at the time of admission of a new partner. In such a situation, goodwill is calculated on the basis of net worth of the business. Hidden goodwill is the excess of desired total capital of the firm over the actual combined capital of all partners'.
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