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How to calculate goodwill?

Others 444 views 3 replies
A and B are partners Profit and Losses in ratio 3:2. C is admitted for 1/5Th share and brings Rs.10,000 As capital and necessary amount For his share of goodwill. The goodwill of entire firm is valued Rs.40,000. . . Goodwill brought by C is? plz explain.
Replies (3)

in this case goodwill brought by c will be one fifth of total goodwill i.e. 8000. 

the reason is afterwards at a later point of time when the firm is sold all the assets including goodwill will be shared among the partners in profit sharing ratio. so at that time he will get one fifth of goodwill i.e. 8000. but  the total goodwill(40000) is not  generated by c but generated by A and B alone. so since  C will get goodwill amount in the future, he is now giving that amount to enter into the firm

                                                                                                                 regards.

                                                                                                                VIJAY

Originally posted by : Shubham kumar
A and B are partners Profit and Losses in ratio 3:2. C is admitted for 1/5Th share and brings Rs.10,000 As capital and necessary amount For his share of goodwill. The goodwill of entire firm is valued Rs.40,000. . . Goodwill brought by C is? plz explain.

C is the new partner sharing 1/5th share. 
hence, Total capital of the partnership concern = 10000*5/1 = wich is equal to Rs.50000 .
and on the other side total goodwill of firm is = Rs.40000. 
so, therefore, 
G/W brought by C is = 50000-40000

                                      =Rs.10000 . 

Regards, 
Ankit Gupta

i agree with vijay bhasker he is correct that the amount of goodwill brought in by C is Rs 8,000. and Rs  2,000(i.e. 10,000-8000,)  shall be his share of Capital 


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