A & B are partners sharing profits in ratio of 1:2. Their fixed capitals were ₹2,00,000 & ₹3,00,000 respectively. C was admitted with 1/4th share and brought ₹2,00,000 for his capital which was also kept fixed. C acquired his share of profit from B.
Calculate C's share of goodwill?
Answer & explanation
Correct answer: option 1
The correct answer is option 1- ₹25,000.
Total capital of firm = ₹7,00,000
On basis of C's share, the capital of the firm should be = 2,00,000*4
= ₹8,00,000
So, goodwill of firm = 8,00,000-7,00,000
= ₹1,00,000
C's share = 1,00,000*1/4
= ₹25,000