What is the treatment of goodwill in case of retirement of a partner ?

None of the above

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First all partners capital account are credited in their old ratio & then gaining partners capital accounts are debited in their old ratio

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First all partners capital account are credited in their old ratio & then gaining partners capital accounts are debited in their gaining ratio

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Gaining partners capital account are debited in their gaining ratio & retiring partner`s capital account is credited with his share

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Solution

The correct option is D
Gaining partners capital account are debited in their gaining ratio & retiring partner`s capital account is credited with his share

The treatment of goodwill in case of retirement of a partner-
Gaining partners capital account are debited in their gaining ratio & retiring partner`s capital account is credited with his share.

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Similar questions

If the value of goodwill is Rs. 3,00,000. The PSR of A, B and C is 1:1:1. A retires and new profit sharing ratio is 1:1. B and C Capital accounts will be debited with what amount?

Gaining partners capital accounts are debited in the ____________ ratio to give effect to treatment of goodwill.

The sacrificing partner’s capital account is debited with his/her share of goodwill and gaining partner’s capital account is credited in their gaining ratio.

Q. When required amount for premium for goodwill is not brought in by new partner, goodwill account is raised in the books of the firm by debiting goodwill account and crediting partners capital account in old profit sharing ratio and written off in ______ if it agreed not show goodwill in the books of the firm OR ALTERNATIVELY premium for goodwill should be adjusted through partners capital account by debiting new partners share of goodwill to his account and crediting old partners capital accounts in _________.

While adjusting for goodwill, ___________ partners' capital account is debited and ___________ partners' capital account is credited.

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