On R 's retirement, the amount payable to him after all adjustments works out to be Rs. 60,000 but the remaining partners P and Q agreed to pay him Rs - Accountancy MCQ CUET Accountancy 2023 29 May Shift 2 2026 | ExamTest.live

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On R's retirement, the amount payable to him after all adjustments works out to be Rs. 60, 000 but the remaining partners P and Q agreed to pay him Rs. 75, 000 in full settlement of his claim. Identify the term which represents the Rs. 15, 000 extra that is paid to R .

Solution & Step-by-step Explanation

When a retiring partner is paid a lump sum amount that is greater than their actual net adjusted capital claim, the excess payment represents the retiring partner's share of Hidden Goodwill (or inferred goodwill) of the firm. Hidden Goodwill = Amount Paid in Full Settlement - Actual Adjusted Capital Due Hidden Goodwill = 75, 000 - 60, 000 = 15, 000

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On R's retirement, the amount payable to him after all adjustments works out to be Rs. 60, 000 but the remaining partners P and Q agreed to pay him Rs. 75, 000 in full settlement of his claim. Identify the term which represents the Rs. 15, 000 extra that is paid to R .

Share in Profits

Hidden Goodwill

Interest on his Capital

Compensation for Past work

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