Question

X and y are partner with capital of 16000 and 12000 respectively .they admit z as a partner with one fourth share in profits of the firm . Z bring 16000 as his capital.
Value of Goodwill

Answer 1

Answer:

Here hidden goodwill will be calculated as follows.

whole value of the firm = 16000*4/1= 64000

Now capital of the firm = X+y+z

= 16000+12000+16000= 44000

Now goodwill = 64000-44000= 20000

Z's share of goodwill will be. 20000*1/4= 5000