Old ratio is (2:1), new ratio is (1:2), and goodwill is (₹90000). What is A's net effect when goodwill is raised and written off?

Correct answer: Credit A (₹30000)

Direct answer: Option B, Credit A ₹30,000. A’s old share is 2/3, so when goodwill is raised A is credited ₹90,000 × 2/3 = ₹60,000. A’s new share is 1/3, so when goodwill is written off A is debited ₹90,000 × 1/3 = ₹30,000. Net effect = ₹60,000 credit − ₹30,000 debit = ₹30,000 credit. Therefore option B is correct. Option A gives the correct amount but the wrong direction. Option C is wrong because the credit and debit are not equal. Option D wrongly credits A with the entire goodwill and ignores the partnership ratios. The old ratio is used for raising goodwill, while the new ratio is used for writing it off. Exam cue: calculate two separate amounts before finding the net effect.