A and B are partners sharing profits equally with capitals of Rs. 45,000 each. They admitted C as a new partne

Question

A and B are partners sharing profits equally with capitals of Rs. 45,000 each. They admitted C as a new partner for 1/3rd share in the profit. C brings Rs. 60,000 as his capital. Find the goodwill of the firm.

Accepted Answer

This is a problem of Hidden Goodwill:Total Capitalized Value of the Firm based on C's capital contribution:

Total Capital = C’s Capital \times \frac{1}{C’s Share} = 60, 000 \times \frac{3}{1} = Rs. 1, 80, 000

Combined Actual Capital of all partners (including C):

Actual Capital = Capital of A + Capital of B + Capital of C

Actual Capital = 45, 000 + 45, 000 + 60, 000 = Rs. 1, 50, 000

Goodwill of the Firm:

Firm’s Goodwill = Total Capitalized Value - Combined Actual Capital

Firm’s Goodwill = 1, 80, 000 - 1, 50, 000 = Rs. 30, 000

A and B are partners sharing profits equally with capitals of $Rs. 45, 000$ each. They admitted C as a new partner for $\frac{1}{3} rd$ share in the profit. C brings $Rs. 60, 000$ as his capital. Find the goodwill of the firm.

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A and B are partners sharing profits equally with capitals of Rs. 45,000 each. They admitted C as a new partner for 31​rd share in the profit. C brings Rs. 60,000 as his capital. Find the goodwill of the firm.