A, B & C are equal partners. D is admitted to the firm for one-fourth share. D brings Rs 40,000 capital and Rs 10,000 being half of the premium for goodwill. The value of goodwill of the firm is ________.

Rs. 20,000

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Rs. 80,000

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Rs. 40,000

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None of the above

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Solution

The correct option is B Rs. 80,000
D bought Rs 10000 as half of the premium for goodwill.
Full amount of his share of goodwill 100002 =Rs 20000
Value of goodwill of the firm = 20000 4/1
= Rs 80000

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A, B & C are equal partners. D is admitted to the firm for one-fourth share. D brings Rs 40,000 capital and Rs 10,000 being half of the premium for goodwill. The value of goodwill of the firm is ________.

The correct option is B Rs. 80,000D bought Rs 10000 as half of the premium for goodwill.Full amount of his share of goodwill 10000*2 =Rs 20000Value of goodwill of the firm = 20000 * 4/1 = Rs 80000

The correct option is B Rs. 80,000
D bought Rs 10000 as half of the premium for goodwill.
Full amount of his share of goodwill 100002 =Rs 20000
Value of goodwill of the firm = 20000 4/1
= Rs 80000