Question

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

Answer 1

Answer:

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