X and Y are partners with capitals ₹60,000 and ₹40,000. Z brings ₹50,000 as capital for 1/3rd share. Goodwill already appears in books at ₹30,000. The entry for existing goodwill will be:
A. Debit goodwill, credit all partners in new ratio
B. Debit all partners' capital in old ratio, credit goodwill
C. Debit X and Y, credit goodwill
D. No entry
Answer: Option B
Solution (By JKSSB Mock Tests)
Existing goodwill must be written off by debiting old partners' capital accounts in old ratio.
No comments yet. Be the first to start the discussion!