Question

Vinay and naman are partners sharing profit in the ratio of 4:1 their capitals were 90000 and 70000 respectively they admitted Prateek for 1/3 share in the profits Prateek brought 100000 as his capital calculate the value of firm's goodwill

Answer 1

Calculation of goodwill:

Prateek share of goodwill = 100000×3/1 =300000.

Firm goodwill = vinay capital + naman capital + prateek capital

= 90000+70000+100000

=260000.

Answer 2

Calculation of goodwill:

Prateek share of goodwill = 100000×3/1 =300000.

Firm goodwill = vinay capital + naman capital + prateek capital

= 90000+70000+100000

=260000.

Goodwill in accounting is regarded as an intangible asset in a firm the value of which arises when any buyer gets hold of an existing business.

It can be calculated as the excess of the purchase calculation over the total value of all liabilities and assets.