Partners M, N and O share profit in the ratio 3:2:1. On dissolution, goodwill is valued at Rs. 2,00,000 and is to be adjusted in the outgoing partners’ capital accounts in the profit‑sharing ratio. Partner O is the outgoing partner, while M and N are incoming. How much goodwill will be credited to partner O’s capital account?

Step-by-step solution

1. Goodwill Rs. 2,00,000 is distributed among the outgoing partners only, in the profit‑sharing ratio of the partners who are leaving. In this case, only partner O is outgoing.
2. When only one partner is outgoing, the entire goodwill is credited to that partner’s capital account. Hence partner O’s capital account is credited with the full goodwill.
3. Therefore the goodwill credited to partner O is Rs. 2,00,000.

Concept tested: Goodwill adjustment to outgoing partners’ capitals

Published 28 September 2026 · How this solution was prepared and checked