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At a partner's retirement, who compensates him for his share of goodwill?
AThe gaining partners, in their gaining ratio
BAll partners, in the old ratio
CContinuing partners, in their capital ratio
DContinuing partners, in equal shares
Answer & Solution
Correct answer: A. The gaining partners, in their gaining ratio
The partners who gain extra profit share from his departure are the ones who must pay him for the goodwill, in proportion to their gain.
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