G, H and P are partners. On retirement of G, the goodwill already appears in the Balance Sheet at Rs. 24,000. The goodwill will be written-off Option 1: By debiting all partners' capital accounts in their old profit sharing ratio Option 2: By debiting remaining partners' capital accounts in their new profit sharing ratio. Option 3: By debiting retiring partners' capital accounts from his share of goodwill. Option 4: By debiting retiring partners' capital accounts in gaining ratio.

Answer: By debiting all partners' capital accounts in their old profit sharing ratio. Solution: When goodwill already appears in the Balance Sheet at the time of a partner's retirement, it must be written off before making any other adjustments. The existing goodwill of Rs. 24,000 represents an intangible asset that was recorded earlier when all the partners (G, H, and P) were actively part of the firm. Since this goodwill was accumulated during the period when all three partners were sharing profits and losses in their old ratio, it belongs to all of them in that same ratio. Journal Entry for writing off existing goodwill:, Account, Debit (Rs.), Credit (Rs.), G's Capital A/c, (share in old ratio), H's Capital A/c, (share in old ratio), P's Capital A/c, (share in old ratio), To Goodwill A/c, 24,000, The retiring partner G must also bear his share of the loss from writing off goodwill because he was a beneficiary when this goodwill was originally recorded in the books. The old ratio is used because that was the ratio in which all partners shared profits and losses before the retirement. After writing off the existing goodwill, if the firm decides to raise new goodwill for G's retirement, that would be a separate adjustment where only the continuing partners (H and P) would compensate G in the gaining ratio. Correct Option: 1 - By debiting all partners' capital accounts in their old profit sharing ratio

Partnership

Retirement/Death

Easy

common

G, H and P are partners. On retirement of G, the goodwill already appears in the Balance Sheet at Rs. 24,000. The goodwill will be written-off

By debiting all partners' capital accounts in their old profit sharing ratio

By debiting remaining partners' capital accounts in their new profit sharing ratio.

By debiting retiring partners' capital accounts from his share of goodwill.

By debiting retiring partners' capital accounts in gaining ratio.

✅ Correct Option: 1

When goodwill already appears in the Balance Sheet at the time of a partner's retirement, it must be written off before making any other adjustments.

The existing goodwill of Rs. 24,000 represents an intangible asset that was recorded earlier when all the partners (G, H, and P) were actively part of the firm. Since this goodwill was accumulated during the period when all three partners were sharing profits and losses in their old ratio, it belongs to all of them in that same ratio.

Journal Entry for writing off existing goodwill:

Account	Debit (Rs.)	Credit (Rs.)
G's Capital A/c	(share in old ratio)
H's Capital A/c	(share in old ratio)
P's Capital A/c	(share in old ratio)
$\quad$ To Goodwill A/c		24,000

The retiring partner G must also bear his share of the loss from writing off goodwill because he was a beneficiary when this goodwill was originally recorded in the books. The old ratio is used because that was the ratio in which all partners shared profits and losses before the retirement.

After writing off the existing goodwill, if the firm decides to raise new goodwill for G's retirement, that would be a separate adjustment where only the continuing partners (H and P) would compensate G in the gaining ratio.

Correct Option: 1 - By debiting all partners' capital accounts in their old profit sharing ratio

2025: 13 May Shift 2

Naveen, Suresh and Tarun are partners sharing profits and losses in the ratio of 5:3:2. Suresh retires from the firm and his share was acquired by Naveen and Tarun in the ratio 2:1. The new profit sharing ratio is

2026: 21 May Shift 2

Rubina and Mukta were partners sharing profits & losses equally. As per the partnership agreement, the share of profit of the deceased partner will be worked out on the basis of sales, and specified that the sales during the year 2024-25 were Rs. 9,00,000, and profit for same period was Rs.3,00,000 and the sales from April 1, 2025 - September 30, 2025 were Rs. 1,50,000 Rubina died on September 30, 2025. Calculate Rubina's share of profit.

2025: 14 May Shift 1

Keshav, Nirmal and Pankaj are partners sharing profits and losses in the ratio of 4 : 3 : 2. Nirmal retires and the goodwill is valued at Rs. 72,000. Keshav and Pankaj decided to share future profits and losses in the ratio of 5 : 3. Gaining Ratio of Keshav and Pankaj is:

2025: 3 June Shift 1

Naveen, Suresh and Tarun are partners, sharing profits and losses in the ratio of 5:3:2. Suresh retires from the firm and his share was acquired by Naveen and Tarun in the ratio of 2:1. Calculate the new share of profit :

2023: 20 June Shift 2

A, B, C were partners in a partnership firm their profit sharing ratio was 5:3:2. B retires and the new profit sharing ratio between A and C was 3:2. Calculate gaining ratio.

2026: 11 May Shift 1

Arrange the following steps in the order of the accounting treatment in case of death of a partner.

A. Adjustment of capital account of the existing partner.

B. Transfer of share of goodwill to deceased partner's capital account.

C. Transfer of amount from deceased partner's capital account to executor's account.

D. Calculation of New Profit Ratio and Sacrificing Ratio.

Choose the correct answer from the options given below:

G, H and P are partners. On retirement of G, the goodwill already appears in the Balance Sheet at Rs. 24,000. The goodwill will be written-off

Solution

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