Hem and Nem are partners in a firm sharing profits in the ratio of 3:2. Their capitals were Rs. 80,000 and Rs. 50,000 respectively. They admitted Sam on Jan. 1, 2017 as a new partner for 1/5 share in the future profits. Sam brought Rs. 60,000 as his capital. Calculate the share of Sam in the goodwill of the firm if Sam brings his share of goodwill in Cash.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Rs. 22,000
When the goodwill is not given, it is worked out from the capital the new partner brings for his share (hidden goodwill). Sam's capital fixes what the capital of the whole firm should be; the shortfall of the actual capitals is the firm's goodwill.
Total capital of the new firm (on Sam's capital) = Rs. 60,000 x 5/1 = Rs. 3,00,000
Actual capitals = Rs. 80,000 + Rs. 50,000 + Rs. 60,000 = Rs. 1,90,000
Goodwill of the firm = Rs. 3,00,000 - Rs. 1,90,000 = Rs. 1,10,000
Sam's share of goodwill = Rs. 1,10,000 x 1/5 = Rs. 22,000
Sam brings Rs. 22,000 in cash as premium for goodwill, which goes to Hem and Nem in their sacrificing ratio 3:2 (Rs. 13,200 and Rs. 8,800).
Note: NTA dropped this question. For the benefit of students and to give them additional practice, the question has been suitably modified so that it has one clear answer.
NCERT (2026-27 edition):
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