Home › CBSE Class 12 (Commerce) › Accountancy › Accounting for Partnership Firms: Change in Profit-Sharing Ratio and Admission of a Partner › A new partner pays a premium for goodwill mainly…
A new partner pays a premium for goodwill mainly to compensate whom?
AThe tax authorities
BThe firm's employees
CThe sacrificing old partners
DThe creditors of the firm
Answer & Solution
Correct answer: C. The sacrificing old partners
Old partners give up part of their share in the firm's super profits, and the premium makes up for that loss.
Related questions
Giri and Shanta share equally. Kachroo pays Rs. 20,000 goodwill for 1/5, old-ratio sacrifiAverage profit Rs. 90,000, capital Rs. 8,00,000, normal rate 10%. Goodwill at 4 years' supProfits were 16,000; 20,000; 24,000; 32,000 on capital Rs. 1,00,000 at 18%. Goodwill at 3 Two equal partners admit C and the ratio becomes 2:1:2. Their sacrificing ratio?A and B share 2:1; with C the ratio becomes 3:2:1. Who sacrifices?Two equal partners admit C for 1/3, taken equally from both. New ratio?AS 26 defines an intangible asset as identifiable and what else?Purchased goodwill kept in books should be written off over at most how long?