An incoming partner pays his share of goodwill in cash and profit sharing ratio of old partner 39 s ...........

General Accounting Principles Partnership

An incoming partner pays his share of goodwill in cash and profit sharing ratio of old partner's is changed, goodwill will be distributed among old partners in

as their old profit sharing ratio

according to new ratio

according to sacrificing ratio

none of these

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Explanation:

Under this method, when the incoming partner brings his share of goodwill in cash, the existing partners share it in the sacrificing ratio. However, when the amount of goodwill is paid privately by the new partner to old partners privately in cash, no entry is passed in the books of the firm. (This method is known as premium method)