Rohan, Bharti and Leela are partners. On the retirement of Rohan, the goodwill already appears in the balance sheet at ₹24,000. The goodwill will be written-off:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → By debiting all partners' capital accounts in their old profit-sharing ratio
Goodwill already in the balance sheet was built up while all the partners, Rohan included, were in the firm. So before the retirement is settled, this old goodwill is written off among all the partners in their old profit sharing ratio; the retiring partner's share of goodwill is then dealt with separately at its current value.
Why the other options are incorrect
Option (2) By debiting remaining partners' capital accounts in their new profit sharing ratio — Incorrect. The old goodwill belongs to the old firm, so Rohan must bear his part of it too; the new ratio is used only for future profits.
Option (3) By debiting retiring partners' capital accounts from his share of goodwill — Incorrect. The retiring partner bears only his share of the written-off goodwill, not the whole amount.
Option (4) By debiting the retiring partners' current account from his share of goodwill — Incorrect. It again loads the whole write-off on one partner, and the write-off is made through the capital accounts of all partners.
NCERT (2026-27 edition):
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