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.

₹22,000

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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