Question

Raghav and Sahil were partners sharing Profit & Loss in the ratio 5 : 3. Their capital balances were ₹ 7,20,000 and ₹ 2,80,000 respectively. There were balances of General Reserve of ₹ 5,00,000 and Deferred Revenue Expenditure of ₹ 4,00,000 in the books of the firm. They admitted Ojasv into partnership for 20% share for which he brings ₹ 4,00,000 as capital. Determine the goodwill share of Ojasv.

विकल्प

• ₹ 5,00,000

• ₹ 1,00,000

• ₹ 1,20,000

• ₹ 60,000

Answer 1

₹ 1,00,000

Explanation:

Adjust Capitals of Old Partners:

General Reserve = ₹ 5,00,000

Distributed in old ratio 5 : 3

Raghav = `5,00,000 xx5/8`

= 3,12,500

Sahil = `5,00,000 xx3/8`

= 1,87,500

Deferred Revenue Expenditure = ₹ 4,00,000

This is a loss, written off in 5 : 3

Raghav = `4,00,000 xx 5/8`

= 2,50,000

Sahil = `4,00,000 xx 3/8`

= 1,50,000

Calculate Adjusted Capitals:

Raghav = 7,20,000 + 3,12,500 − 2,50,000

= 7,82,500

Sahil = 2,80,000 + 1,87,500 − 1,50,000

= 3,17,500

Total Adjusted Capital of Old Partners:

= 7,82,500 + 3,17,500

= 11,00,000

Ojasv’s Capital = ₹ 4,00,000 represents 20% share

So, Total Capital of the firm after admission:

Total Capital = `(4,00,000)/0.20`

= 20,00,000

Required Capital of Old Partners:

= 80% of 20,00,000 = 16,00,000

But their existing adjusted capital = 11,00,000

Difference = Hidden Goodwill

= 16,00,000 − 11,00,000

= 5,00,000

Ojasv’s Share of Goodwill:

= 20% of 5,00,000

= 1,00,000