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Question
Yuvraj and Yogesh were partners in a firm sharing profits in the ratio of 2: 1. They admitted Yogita as a new partner for `1/5` th share in future profits. Capital of Yuvraj and Yogesh were ₹ 450,000 and ₹ 1,50,000 respectively. Yogita brought ₹ 2,50,000 as her capital. The value of goodwill of the firm on Yogita's admission was ______.
Options
₹ 5,50,000
₹ 8,50,000
₹ 12,50,000
₹ 4,00,000
Solution
Yuvraj and Yogesh were partners in a firm sharing profits in the ratio of 2: 1. They admitted Yogita as a new partner for `1/5` th share in future profits. Capital of Yuvraj and Yogesh were ₹ 450,000 and ₹ 1,50,000 respectively. Yogita brought ₹ 2,50,000 as her capital. The value of goodwill of the firm on Yogita's admission was ₹ 4,00,000.
Explanation:
Yogita brought capital for 1/5th Share = ₹ 2,50,000
Total capital of the firm =`₹ 2,50,000 xx 5/1 = ₹ 12,50,000`
Actual total capital of Yuvraj, Yogesh and Yogita = ₹ 4,50,000 + ₹ 1,50,000 + ₹ 2,50,000
= ₹ 8,50,000
Value of GoodWill of the firm = Total capital of firm - Actual total capital
= ₹ 12,50,000 - ₹ 8,50,000
= ₹ 4,00,000
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