Yash and Karan were partners in an interior designer firm. Their fixed
capitals were * 6,00,000 and 4,00,000 respectively. There were credit
balances in their current accounts of 4,00,000 and 75,00,000
respectively. The firm had a balance of 1,00,000 in General Reserve.
The firm did not have any liability. They admitted Radhika into
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partnership for
th share in the profits of the firm. The average profits
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of the firm for the last five years were * 5,00,000. Calculate the value of
goodwill of the firm by capitalization of average profits method. The
normal rate of return in the business is 10%.
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Answer:
4:5:3 is the correct answer
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