Question

Upon a admission of Champak Lal in a partnership firm as a new partner for 1/4th share of profit, the goodwill of the firm is valued at Rs.40,000. Goodwill will be raised by _____.

• A. Rs.10,000
• B. Rs.40,000
• C. Rs.30,000
• D. Rs.20,000

Answer 1

Answer: (B)

Rs.40,000

goodwill the reputation of the firm the firm can either purchase goodwill or self-generate goodwill basically goodwill is raised by incoming partner ,

goodwill of the firm raised by firm 40000. and

new partner share is =1/4

so, 40000*1/4=10000