Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Reconstitution of Partnership Firm: Retirement and Death

Question:

X, Y, Z were partners sharing profits and losses in the ratio of 1:2:3. Z retired and his capital after making all adjustments is ₹220000. X & Y agreed to pay him ₹250000 in full settlement of his claim. The new profit-sharing ratio is 1:3.

What is the amount of hidden goodwill in Z's share?

Options:

₹20000

₹30000

₹25000

₹35000

Correct Answer:

₹30000

Explanation:

Agreed amount = ₹250000
Z's capital after adjustments = ₹220000
Hidden goodwill = Agreed capital - Capital after adjustment
                          = 250000 - 220000
                          = ₹30000