Question

Hem and Nern are partners in firm sharing profits in the ratio of 3:2. Their capitals were Rs. 80,000 and Rs. 50,000 respectively. They admitted Sam on Jan. 1 2019 as a new partner for 1/5 share in the future profits. Sam brought Rs. 60,000 as his capital. Calculate the value of goodwill of the firm.

Options

• 1,00,000

• 2,00,000

• 3,00,000

• 4,00,000

Answer 1

2,00,000

Explanation:

Sam's capital = Rs. 60,000

Sam's share = `1/5`

Total capital of new firm = 5 × Rs. 60,000 = Rs. 3,00,000

Hem's + Nem's + Sam's = Rs. 80,000 + Rs. 50,000 + Rs. 60,000 = Rs. 1,90,000.

Goodwill of the firm = Rs. 1,10,000 (Rs. 3,00,000 - Rs. 1,90,000)

Sam's share = `1/5 × "Rs". 1,10,000 = 22000`