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On the admission of a new partner, ₹20,000 is brought in cash as premium for goodwill. If the sacrificing ratio of the two old partners is 1:1, how much will each old partner receive?

Answer and explanation

Correct answer: ₹10,000

The premium for goodwill is distributed among the old partners in their sacrificing ratio. Since the ratio is 1:1, the total premium of ₹20,000 is divided into two equal parts: ₹20,000 × 1/2 = ₹10,000. Thus, each old partner receives ₹10,000. Exam tip: With an equal sacrificing ratio, each partner receives half of the total premium.

Related tags

Goodwill AccountingSacrificing RatioAdmission Of PartnerReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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