a firm of partners a,b,c has fixed capital of ₹100000,₹80000and₹120000respectively interest on capital is allowed @10/p.a the profit of last four years before interest on capital were 1st year ₹50000 IInd year ₹40000,IIIrd year ₹70000,Ivth year ₹60000 partners have been allowed salary of ₹80000 intotal during the above four years as per agreement goodwill of the firm is to be valued at 21/2 years of the average net profit of the last four year
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Working Note:
Distribution of Profit:
Profit available for distribution= 172000-12000-20000
= 140000
A's share= [20000*1/4] + [30000*5/10] + [90000*1/3]
= 5000+15000+30000
= 50000
B's share= [20000*1/4] + [30000*3/10] + [90000*1/3]
= 5000+9000+30000
= 44000
C's share= [20000*2/4] + [30000*2/10] + [90000*1/3]
= 10000+6000+30000
= 46000
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