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Explain the treatment of goodwill in the books of a firm on the admission of a new Partner when goodwill already appears in the Balance sheet at its full value and the new partner brings his share of good will in cash. |
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Answer» By following accounting standard -10, the existing goodwill (i.e. goodwill appearing in the Balance Sheet ) is written off to the old partners Capital a/c in their old profit sharing ratio. Old partners capital A/c Dr. ..... To Goodwill A/c [Being the existing g/w written off in the old ratio.] |
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