A, B and C were partner's in a firm sharing profit and losses in the Ratio of 5 : 3 : 2. They admitted D into partnership for 1/5 share of profit which he takes equally from A and B. D brought sufficient amount of goodwill in cash Capital brought in by is Rs. 50,000. On the date of admission the Balance Sheet of A, B and C was as follows : Balance Sheet as on 31st March, 2021, Liability, Rs., Assets, Rs., Capital, Building and Furniture, 1,50,000, A 1,00,000, Debtors 55,000, B 60,000, Provision 5,000, 50,000, C 40,000, 2,00,000, Cash, 20,000, Creditors, 50,000, Profit and Loss (2020-21), 30,000, 2,50,000, 2,50,000, Goodwill is to be valued at 3 years purchase of average profit of last 4 years which were Rs. 60,000 (2017-18), Rs. 60,000 (18-19), Rs. 30,000 (19-20). On revaluation it was found that all debtors are good. Calculate the total amount brought in by new partner D including Goodwill share : Option 1: 50,000 Option 2: 68,000 Option 3: 1,40,000 Option 4: 18,000

Answer: 68,000. Solution: Firm goodwill = Rs. 90,000. D's share of goodwill = 1/5 x 90,000 = 18,000. Capital brought = 50,000. Total amount brought in = 50,000 + 18,000 = Rs. 68,000.

Partnership

Admission

Medium

A, B and C were partner's in a firm sharing profit and losses in the Ratio of 5 : 3 : 2. They admitted D into partnership for 1/5 share of profit which he takes equally from A and B. D brought sufficient amount of goodwill in cash Capital brought in by is Rs. 50,000. On the date of admission the Balance Sheet of A, B and C was as follows :

Balance Sheet as on 31st March, 2021

Liability	Rs.	Assets	Rs.
Capital		Building and Furniture	1,50,000
A 1,00,000		Debtors 55,000
B 60,000		Provision 5,000	50,000
C 40,000	2,00,000	Cash	20,000
Creditors	50,000	Profit and Loss (2020-21)	30,000
	2,50,000		2,50,000

Goodwill is to be valued at 3 years purchase of average profit of last 4 years which were Rs. 60,000 (2017-18), Rs. 60,000 (18-19), Rs. 30,000 (19-20). On revaluation it was found that all debtors are good.

Calculate the total amount brought in by new partner D including Goodwill share :

50,000

68,000

1,40,000

18,000

✅ Correct Option: 2

Firm goodwill = Rs. 90,000.

D's share of goodwill = $\frac{1}{5} \times 90,000$ = 18,000.

Capital brought = 50,000.

Total amount brought in = 50,000 + 18,000 = Rs. 68,000.

Question 41

From the above calculate amount of Goodwill :

Question 43

What would be the new Profit Sharing Ratio :

Question 44

What would be the effect of the line "All Debtors are good.

Question 45

Goodwill brought in by new partners would be _________.

Calculate the total amount brought in by new partner D including Goodwill share :

Solution

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