If the incoming partner brings the amount of goodwill in cash and also a balance exists in Goodwill A/c, then the Goodwill A/c in the books is written off among the old partners in which ratio?
Answer & explanation
Correct answer: option 2
The correct answer is option 2- In old profit-sharing ratio.
When a new partner is admitted and brings in cash for goodwill, the existing goodwill in the books needs to be adjusted. The balance in the Goodwill Account is written off among the old partners based in their old profit-sharing ratio.