Goodwill of a firm of A and B is valued at rs. 30,000 it is appearing in the Books at rs. 12000.C is admitted far 1/4 share what amount he is supposed to bring for goodwill
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When the value of the goodwill of the firm is not specifically given, the value of goodwill has to be inferred as follows:
Goodwill = (Incoming partner's capital * Reciprocal of share of incoming partner) - Total capital after taking into consideration the capital brought in by incoming partner.
Goodwill = [Rs. 20000 * (3/1)] - Rs. (13000 + 17000 + 20000)
Goodwill = Rs. 60000 - Rs. 50000
Goodwill = Rs. 10000
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