Hem and Nem are partners in a firm sharing profits in the ratio of 3:2. Their capitals were ₹80,000 and ₹50,000 respectively. They admitted Sam on Jan. 1, 2017 as a new partner for 1/5 share in the future profits. Sam brought ₹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- ₹22,000.
Sam's Capital = 60,000
Sam's Share = 1/5
Total capital of the firm on basis of Sam's share = 60,000 x 5/1
= 3,00,000
Actual total capital of the firm = Sam's capital + Hem's capital + Nem's capital
= 60,000 + 80,000 + 50,000
= 1,90,000
The difference between actual capital and capital based on Sam's share is hidden goodwill of the firm.
Goodwill = 3,00,000 - 1,90,000
= 1,10,000
Sam' share in goodwill = 1,10,000 x 1/5
= 22,000
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