Goodwill is taken into account in partnership business when
- the business is being dissolved
- the business has good customer relations
-
a new partner is admitted
- when the business is making huge profit
The correct answer is: C
Explanation
When a new partner joins the existing partnership, they bring in capital or expertise. The existing goodwill of th business (positive reputation, customer base, etc.) might justify paying the existing partners a premium above the book value of their capital investment. This premium is recorded as goodwill.