At the time of retirement of a partner, Goodwill existing in the Balance Sheet is written off by passing the following Journal entry:
At the time of retirement of a partner, Goodwill existing in the Balance Sheet is written off by passing the following Journal entry:
a)
Goodwill A/c Dr.
To Partner’s Capital A/cs (including Retiring Partner)
b)
Retiring Partner’s Capital A/c Dr.
To Goodwill A/c
c)
Partner’s Capital A/cs Dr. (including retiring Partner)
To Goodwill A/c
d)
Continuing Partner’s Capital A/cs Dr.
To Goodwill A/c
Anurag Pathak Changed status to publish July 2, 2023
Ans – c)
Explanation:-
The old goodwill is the purchased goodwill. It is purchased in the past by all the partners including retiring partners. Thus Existing Goodwill is written off in the old profit-sharing ratio among all the partners including retiring partners.
Anurag Pathak Changed status to publish July 2, 2023
