Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Admission of a Partner

Question:

Based on following, answer the question.

Amrita and Kalyani are partners sharing profits in the ratio of 3:2. They decided to expand the business by admitting Suraj as new partner for 1/4th share. Suraj's share of goodwill is valued at ₹90,000 for which he compensated Amrita and Kalyani in the ratio of 1:4. Following information is also provided:

Particulars Book value (₹) Revalued figure (₹)
Machinery 25,00,000 27,00,000
Land 10,00,000 50,00,000
Computers 2,50,000 50,000

 Workmen Compensation Fund  ₹5,00,000. Claim against workmen compensation is ₹2,00,000 and goodwill appeared in the books at ₹60,000.

Goodwill brought by Suraj will be distributed as:

Options:

₹54,000 ₹36,000

₹2,16,000; ₹1,44,000

₹18,000; ₹72,000

₹72,000; ₹18,000

Correct Answer:

₹18,000; ₹72,000

Explanation:

Goodwill is distributed in the ratio of  1:4
Suraj's share in goodwill is ₹90000
So, ₹90000 is distributed in ratio of 1:4
Amrita share = 90000 x 1/5
                     = ₹18000
Kalyani share = 90000 x 4/5
                      = ₹72000