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Standard XII

Accountancy

Goodwill Valuation (Retirement)

X Y share p...

Question

X & Y share profits & losses in the ratio of $2 : 1$ . They take Z as a partner and the new profit sharing ratio becomes $3 : 2 : 1$ . Z brings Rs. $4, 500$ as premium for goodwill. The full value of goodwill will be _____________.

R s .24, 000

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R s .27, 000

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R s .18, 000

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R s .4, 500

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Solution

The correct option is B $R s .27, 000$
Z is admitted for 1/6th share of profit
Z's contribution of Rs. 4500 consists of 1/6 share of goodwill only
Thereforfe, total goodwill of firm should be Rs. 4500 * (6/1) = 27000

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X & Y share profits & losses in the ratio of 2:1. They take Z as a partner and the new profit sharing ratio becomes 3:2:1. Z brings Rs.4,500 as premium for goodwill. The full value of goodwill will be _____________.

The correct option is B Rs.27,000Z is admitted for 1/6th share of profitZ's contribution of Rs. 4500 consists of 1/6 share of goodwill onlyThereforfe, total goodwill of firm should be Rs. 4500 * (6/1) = 27000

X & Y share profits & losses in the ratio of $2 : 1$ . They take Z as a partner and the new profit sharing ratio becomes $3 : 2 : 1$ . Z brings Rs. $4, 500$ as premium for goodwill. The full value of goodwill will be _____________.

The correct option is B $R s .27, 000$
Z is admitted for 1/6th share of profit
Z's contribution of Rs. 4500 consists of 1/6 share of goodwill only
Thereforfe, total goodwill of firm should be Rs. 4500 * (6/1) = 27000