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Govind, Hari and Pratap are partners. On the retirement of Govind, the goodwill already appears on the Balance Sheet at ₹24,000. The goodwill will be written off ______ -

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Question

Govind, Hari and Pratap are partners. On the retirement of Govind, the goodwill already appears on the Balance Sheet at ₹24,000. The goodwill will be written off ______

Options

  • by debiting all partners' capital accounts in their old profit sharing ratio.

  • by debiting the remaining partners' capital accounts in their new profit sharing ratio.

  • by debiting retiring partners' capital accounts from his share of goodwill.

  • None of the above

MCQ
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Solution

Govind, Hari and Pratap are partners. On the retirement of Govind, the goodwill already appears on the Balance Sheet at ₹24,000. The goodwill will be written off by debiting all partners' capital accounts in their old profit sharing ratio.

Explanation:

If Goodwill already exists in the books at the time of partnership reconstitution, it is written off by debiting all partners' capital accounts and debiting Goodwill A/c.

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