X, Y and Z are partners sharing profits in the ratio of 4 : 3 : 2. Y retires and his capital after making adjustments for reserves and profits on revaluation stands at Rs. 92,800. X and Z agreed to pay him Rs. 1,00,000 in full settlement of his claim. Find the amount of goodwill of the firm.
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Rs. 21,600
When a retiring partner is paid more than the balance in his capital account (after all adjustments), the excess is his share of goodwill. Goodwill of the whole firm is then found from his share.
Excess paid to Y = Rs. 1,00,000 − Rs. 92,800 = Rs. 7,200
Y’s share of profit = 3/9 = 1/3 (ratio 4 : 3 : 2)
Goodwill of the firm = Rs. 7,200 × 3 = Rs. 21,600
The Rs. 7,200 is only Y’s part; it becomes the firm’s goodwill only after it is grossed up by his share.
NCERT (2026-27 edition): |