Accounts doubt

1355 views
Guest
A and B are partners with capitals of 10K and 20K respectively and sharing profits equally. They admitted C as their partner with one-fourth profits of the firm on the payment of 12K. The amount of hidden goodwill is A. 6000 B.10,000 C.8000 D. None of the above. Please explain the method. Thank you. Also is the question asking for the firms hidden goodwill or the hidden goodwill brought by C.
Reply Share Follow
On 20 May 2012 at 18:45 Report
Replies (2)
Guest

here the question is "calculate the hidden goodwill of the firm?"

 

Ans; goodwill means the value of the firm which is generated due to continuous opertions of the firm. the goodwill is generated by the existing partners and not the new incoming partner.

therefore the incoming partner capital amount must contain a portion for goodwill but the existing partners amount does not contain a portion for goodwill

therefore the actual capital of the firm with goodwill must be

12000------------1/4

?       ------------3/4

12000 * 3/4/1*4 

total capital with goodwill=36000+12000=48000

but the capital of a+b+c= 10k+20k+12k=42k  therfore hidden goodwill =48k-42k=6000

 

Reply
On 20 May 2012 at 19:50
Guest

Thanks a lot.

Reply
On 20 May 2012 at 22:48

Leave a Reply

Post Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Recent Topics :

  1. Updating form 10-ee and Schedule FA if there is ch
  2. Sale of property in SLUM area ....SRA
  3. GST applicability on Shipping charges
  4. Outstanding Demand in Income Tax: How To Respond?
  5. LTCG on property sale
  6. Capital gains incidence due to bonus shares
  7. Amendment of Object Clause of Memorandum
  8. How Can I Request a Refund for an Accidental Airte
  9. TDS on salary paid in cash
  10. YEAR END GST ENTRY FOR RCM NOT PAID RS 5000 I.E OU

More recent discussions | Post

Related Topics :

Loading