Accountancy Part AAdmission of a Partner

A and B are partners sharing profits equally with capitals of ₹45,000…

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) → Rs. 30,000

When the value of goodwill is not given, it is inferred from the capital the new partner brings for his share (hidden goodwill).

Total capital of the new firm on the basis of C’s share = Rs. 60,000 × 3 = Rs. 1,80,000
Actual capital of A, B and C = Rs. 45,000 + Rs. 45,000 + Rs. 60,000 = Rs. 1,50,000
Goodwill of the firm = Rs. 1,80,000 − Rs. 1,50,000
= Rs. 30,000

NCERT (2026-27 edition):
Hidden Goodwill – “… Suppose, A and B are partners sharing profits equally with capitals of Rs. 45,000 each. They admitted C as a new partner for one-third share in the profit. C brings in Rs. 60,000 as his capital. Based on the amount brought in by C and his share in profit, the total capital of the newly constituted firm works out to be Rs.1,80,000 (Rs. 60,000 × 3). But the actual total capital of A, B and C works out as Rs. 1,50,000 (Rs. 45,000 + Rs. 45,000 + Rs. 60,000). Hence, it can be inferred that the difference is on account of goodwill i.e., Rs. 30,000 (Rs. 1,80,000 – Rs. 1,50,000). Which is to be shared equally (old ratio) by A and B.”