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Standard XII

Accountancy

Hidden Goodwill

A and B are t...

Question

A and B are two partners in a firm with capital of Rs 10,000 and Rs 20,000 respectively. They admit C in firm for 1/4 the profits in the firm. C brings Rs 12,000 as his share of capital. What is the amount of goodwill ?

None of the above

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Rs 8000

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Rs 10000

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Rs 6000

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Solution

The correct option is D
Rs 6000

C brings Rs.12,000 for $\frac{1}{4}$ share in the firm

Hence, full capital of the firm will be $(12000 * \frac{4}{1})$ =Rs.48,000

Total capital of all partners (A+B+C) which is (10,000+20,000+12,000) = Rs 42,000

Hidden Goodwill (Rs 48,000 - Rs 42,000) = Rs 6,000

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A and B are two partners in a firm with capital of Rs 10,000 and Rs 20,000 respectively. They admit C in firm for 1/4 the profits in the firm. C brings Rs 12,000 as his share of capital. What is the amount of goodwill ?

The correct option is D Rs 6000 C brings Rs.12,000 for 14 share in the firm Hence, full capital of the firm will be (12000∗41) =Rs.48,000 Total capital of all partners (A+B+C) which is (10,000+20,000+12,000) = Rs 42,000 Hidden Goodwill (Rs 48,000 - Rs 42,000) = Rs 6,000

The correct option is D
Rs 6000

C brings Rs.12,000 for $\frac{1}{4}$ share in the firm

Hence, full capital of the firm will be $(12000 * \frac{4}{1})$ =Rs.48,000

Total capital of all partners (A+B+C) which is (10,000+20,000+12,000) = Rs 42,000

Hidden Goodwill (Rs 48,000 - Rs 42,000) = Rs 6,000