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For which of the following situations, the old profit-sharing ratio of partners is used at the time of admission of a new partner? (a) When new partner brings only a part of his share of goodwill. (b) When new partner is not able to bring his share of goodwill. (c) When, at the lime of admission, goodwill already appears in the balance sheet. (d) When new partner brings his share of goodwill in cash. (C.B.S.E. Sample Paper2020)

SOLUTION

(c) When, at the time of admission, goodwill already appears in the balance sheet.
Note: Existing goodwill must be written off in old profit-sharing ratio of old partners.


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