Question

YashandKaranwerepartnersinaninteriordesignerfirm.Theirfixedcapitalswere

Rs.8,00,000andRs.5,00,000respectively.Therewerecreditbalancesintheircurrent

accountsofRs.4,00,000andRs.5,00,000respectively.Thefirm hadabalanceofRs.

1,00,000inGeneralReserve.Thefirmdidnothaveanyliability.TheyadmittedRadhika

intopartnershipfor thshareintheprofitsofthefirm.Theaverageprofitsofthefirm

1

4

forthelastfiveyearswereRs.5,00,000.Calculatethevalueofgoodwillofthefirm by

capitalizationofaverageprofitsmethod.Thenormalrateofreturninthebusinessis

10%. ​

Answer 1

Explanation:

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