Question 42 Chapter 5 of +2-A
Table of Contents
42. A and B are partners in a firm with capital of 60,000 and 1,20,000
respectively. They decide to admit C into the partnership for 1/4th share in the future profits. C is to bring in a sum of 70,000 as his capital. Calculate amount of goodwill.
The solution of Question 42 Chapter 5 of +2-A: –
Total Capital of the firm on the Basis of C’s Capital
Total Capital of the firm = C’s Capital * Reciprocal of his share
| = | 70,000 | * | 4 | |
| 1 | ||||
| = | 2,80,000 |
Actual Capital of Firm = Capital of Old Partners + Incoming Partner’s Capital
| = | 60,000 + 1,20,000 + 70,000 | |
| = | 2,50,000 |
| Goodwill | = | Total Capital of the firm on basis of Cs Capital |
– Actual Capital of Firm |
| = | 2,80,000 | +2,50,000 | |
| = | 30,000 |
T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)
- Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
- Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
- Chapter No. 3 – Goodwill: Nature and Valuation
- Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
- Chapter No. 5 – Admission of a Partner
- Chapter No. 6 – Retirement/Death of a Partner
- Chapter No. 7 – Dissolution of a Partnership Firm
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
- Chapter No. 4 – Accounting Ratios
- Chapter No. 5 – Cash Flow Statement
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