Question

Consequent upon admission of a new partner in a firm the value of the goodwill is valued at Rs.60,000. But there exists a goodwill account in the balance sheet which stood at Rs.48,000 what would be treatment of goodwill at the time of admission of a new partner if the firm follows revaluation method of goodwill?

• A. Debit goodwill A/c by Rs.12,000
• B. Debit goodwill A/c by Rs.48,000
• C. Debit goodwill A/c by Rs.60,000
• D. Credit goodwill A/c by Rs.12,000

Answer 1

Answer: (A)

Debit goodwill A/c by Rs.12,000

incoming partner raised goodwill= 60000

existing goodwill =48000

goodwill will debited=60000-48000

=12000

then journal entries is=goodwill a/c....Dr

to partners capital a/c