A& B are partner with capitals of Rs 10000 and Rs 20000 respectively and sharing profits equally. they admitted C as their third partner with one-fourth profits of the firm on the payments of Rs12000. the amount of hidden goodwill is
a.6000
b.10000
c.8000
d. none of the above
can anyone answer this question?
Based on C's share ,Capital of of the firm ought to be
12000 X 4/1 = 48000
Combined Capital of A + B + C = 20000 + 10000 + 12000 = 42000.
Value of Hidden goodwill = 48000-42000 = 6000.
So,the correct answer works out to be a.6000
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