When an incoming partner purchases his share from one of existing partners why the total assets of firm will be reduced ifexisting partner withdraws the share surrendered ?
if the incoming partner purchases his share ( or say premium for goodwill) , it means he gives money to the firm which is credited to surrendering partner and surrendering partner withdraws the money ( of premium for goodwill). it is just like drawings of partner and cash goes out of the firm , the total assets are reduced by that cash.