Question : If the new partner brings his share of goodwill in cash, it will be shared by old partners in -
Option 1: Old profit sharing ratio
Option 2: New profit sharing ratio
Option 3: Ratio of sacrifice
Option 4: In Capital ratio
Answer (1)
22nd Jan, 2024
Correct Answer: Ratio of sacrifice
Solution : The new partner's goodwill and premium are kept in the company: The amount is credited to the Capital Accounts of the former partners in their sacrifice ratio if the new partner pays his share of goodwill in cash and this sum is kept in the business.
Hence the correct answer is option 3.
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