A and B are partners sharing profits equally with capitals of ₹45,000 each. They admitted C as a new partner for one- third share in the profit. C brings in ₹60,000 as his capital. Find the value of Firm Goodwill.
Answer & explanation
Correct answer: option 4
The correct answer is option 4- ₹30,000.
C's share = 1/3
Let total share of firm = 1
Remaining share after C = 1-1/3
=2/3
THIS 2/3rd IS DISTRIBUTED BETWEEN A & B equally.
A's new share = 2/3 x 1/2
= 2/6 or 1/3
B's new share = 2/3 x 1/2
= 2/6 or 1/3
New ratio = 1/3 :1/3 :1/3
= 1:1:1
C's capital for 1/3rd share = 60,000
Total capital of the firm = 60,000 x 3/1
= 1,80,000
A and B capitals = ₹45,000 each.
Combined capital of all partners = 45,000 + 45,000 + 60,000
= 1,50,000
Goodwill of firm = 1,80,000 - 1,50,000
= 30,000