Question : Premium for goodwill brought by newly admitted partner should be:
Option 1: Credited to old partners capital account in their sacrificing ratio
Option 2: Credited to all partners in new profit sharing ratio
Option 3: Both 1 and 2
Option 4: None of the above
Correct Answer: Credited to old partners capital account in their sacrificing ratio
Solution : Answer = Credited to old partners' capital account in their sacrificing ratio
When a new partner is admitted, any premium paid for goodwill is typically credited to the old partners' capital accounts in their sacrificing ratio. This reflects the adjustment of the existing partners' capital to account for the goodwill they are giving up as a result of the new partner's admission.
Hence, the correct option is 1.
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