Rohan, Bharti and Leela are partners. On the retirement of Rohan, the…

The correct answer is Option (1) → By debiting all partners’ capital accounts in their old profit-sharing ratio.

Goodwill already in the books belongs to all the partners as they stood before the change. When a partner retires, this existing goodwill is written off among all the partners, the retiring one included, in their old profit sharing ratio; the retiring partner’s share of the firm’s goodwill is then adjusted separately.

Option (2) By debiting remaining partners’ capital accounts in their new profit sharing ratio. — Incorrect. The goodwill was built up when all three were partners, so the retiring partner must bear his part of it too.

Option (3) By debiting retiring partners’ capital accounts from his share of goodwill. — Incorrect. The book value of goodwill is not charged to the retiring partner alone; it is shared by all in the old ratio.

Option (4) By debiting the retiring partners’ current account from his share of goodwill. — Incorrect. Goodwill adjustments go through the capital accounts, and the write-off is shared by all partners, not by the retiring partner’s current account.