Assertion (A): Anahat and Parminder are partners sharing profits in the ratio of 2 : 1. They admit Rubayat as partner w.e.f. 1st January, 2021. On that date, Goodwill existed in the books at ₹ 1,00,000. Goodwill of ₹ 50,000 was written off by debiting capital accounts of Anahat and Parminder in the ratio of 2 : 1. While balance goodwill was carried forward in the Balance Sheet.
Assertion (A): Anahat and Parminder are partners sharing profits in the ratio of 2 : 1. They admit Rubayat as partner w.e.f. 1st January 2021. On that date, Goodwill existed in the books at ₹ 1,00,000. Goodwill of ₹ 50,000 was written off by debiting capital accounts of Anahat and Parminder in the ratio of 2 : 1. While balance goodwill was carried forward in the Balance Sheet.
Reason (R): Goodwill existing in the books is purchased goodwill and therefore, is not written off.
In the context of the above two statements, which of the following is correct?
(a) Assertion (A) and Reason (R) are correct but the Reason (R) is not the correct explanation of Assertion (A).
(b) Both, Assertion (A), and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).
(c) Only Assertion (A) is correct.
(d) Both Assertion (A) and Reason (R) are incorrect.
Anurag Pathak Changed status to publish June 8, 2023
Ans – d)
Explanation:- Existing goodwill is purchased goodwill in the past. at it belongs to only old partners. thus at the time of admission of a new partner. it is completely written off from the books by debiting old partners in their old profit-sharing ratio. it is not written off partially or cannot be carried forward.
Anurag Pathak Changed status to publish June 8, 2023
