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Accounting for Goodwill

Whenever the ...

Question

Whenever the mutual rights of the partners change, then the partner who makes a sacrifice must be compensated.

A

Sacrificing Ratio

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B

New Ratio

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C

Goodwill

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D

Gaining ratio

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Solution

The correct option is C
Goodwill

Yes. The above statement is true

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Q. A and B are equal partners in a firm. They admitted C as 1/6 partner who brought in Rs. 50,000 as goodwill. The new profit sharing ratio is 3 : 2 : 1. If goodwill of Rs. 50,000 is to be paid to the old partners as per sacrificing ratio, B will receive:

In what ratio does the outgoing partner be compensated by remaining partners for the goodwill contributed by him?

Q. Distinguish between the sacrificing ratio and the gaining ratio among partners.

Q. The new partner brings cash for his share of goodwill and the same is shared by the old partners in their sacrificing ratio. The method is called __________.

Q. New incoming partner pays his share of goodwill in cash and profit sharing ratio of old partner is changed, Goodwill be distributed among old partners ____________.

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