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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.26,000 and Rs.22,000 respectively. They admit C in the firm for 1/4th profits in the firm. C brings Rs.26,000 as his share of capital. What is the amount of goodwill ?

None of the above

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Rs 3000

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Rs 104000

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Rs 30000

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Solution

The correct option is D
Rs 30000

C brings Rs.26,000 for $\frac{1}{4}$ share in the firm

Hence, full capital of the firm will be $(26, 000 * \frac{4}{1})$ = Rs.1,04,000

Total capital of all partners (A+B+C) which is (26,000+22,000+26,000) = Rs.74,000

Hidden Goodwill (Rs 1,04,000 - Rs 74,000) = Rs 30,000

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A and B are two partners in a firm with capital of Rs.26,000 and Rs.22,000 respectively. They admit C in the firm for 1/4th profits in the firm. C brings Rs.26,000 as his share of capital. What is the amount of goodwill ?

The correct option is D Rs 30000 C brings Rs.26,000 for 14 share in the firm Hence, full capital of the firm will be (26,000∗41) = Rs.1,04,000 Total capital of all partners (A+B+C) which is (26,000+22,000+26,000) = Rs.74,000 Hidden Goodwill (Rs 1,04,000 - Rs 74,000) = Rs 30,000