A and B are partners with capitals of Rs.20,000 and Rs.40,000 respectively and sharing profits equally. They admitted C as their third partner for one-fourth share for all-purpose on payment of Rs.24,000. The amount of hidden goodwill is ________.
A and B are partners with capitals of Rs.20,000 and Rs.40,000 respectively and sharing profits equally. They admitted C as their third partner for one-fourth share for all-purpose on payment of Rs.24,000. The amount of hidden goodwill is ________.
The correct option is A Rs.12,000
Hidden goodwill
- Hidden goodwill is the excess of desired total capital of the firm over the
actual combined capital of all partner. Sometime the value of goodwill is not given at the time
of admission of a new partner. In such a situation it has to be inferred from
the arrangement of the capital and profit sharing ratio.
Actual
capital of the firm after C's admission = Capital of (A + B + C) = Rs. (20000 + 40000 + 24000)
= Rs. 84000
Capitalized value of
the firm on the basis of C's share = (24000 * 4) / 1
= 96000
Goodwill = Capitalized
value of the firm - Actual capital of the firm
= Rs. (96000 - 84000 )
= Rs. 12000
Hidden goodwill - Hidden goodwill is the excess of desired total capital of the firm over the actual combined capital of all partner. Sometime the value of goodwill is not given at the time of admission of a new partner. In such a situation it has to be inferred from the arrangement of the capital and profit sharing ratio.
Actual capital of the firm after C's admission = Capital of (A + B + C) = Rs. (20000 + 40000 + 24000)
= Rs. 84000
Capitalized value of the firm on the basis of C's share = (24000 * 4) / 1
= 96000
Goodwill = Capitalized value of the firm - Actual capital of the firm
= Rs. (96000 - 84000 )
= Rs. 12000
