Question

27B. X and Y are partners with capitals of 3 16,000 and 12,000 respectively. They admit Z as a
partner with one-fourth share in the profits of the firm. Z brings 16,000 as his capital.
Calculate goodwill of the firm and Z's share in the goodwill.
(U.S.E.B., 2012)
[Ans. Value of Goodwill of the Firm 20,000. Z's Share in Goodwill 5,000.)
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Answer 1

Explanation:

good will of the firm :- [capital of Z × reciprocal of share of Z ] - [ capitals of X Y and Z]

share of Z in goodwill :- goodwill of the firm × share of Z in profit

hence the answer is 20,000 and 5000 respectively.

Thank-you