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Goodwill came in cash but old partners withdrew only half of it. What effect remains on old partners' capital?

Answer and explanation

Correct answer: Full required goodwill is first credited and withdrawal reduces capital

Goodwill is first credited to old partners in sacrificing ratio. Withdrawal separately debits their capital accounts.

Related tags

Retained GoodwillWithdrawalCapital EffectGoodwill AccountingReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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