Question

P, Q and R are sharing profits and losses equally. R retires and the goodwill is appearing in the books at ₹ 30,000. Goodwill of the firm is valued at ₹ 1,50,000. Calculate the net amount to be credited to R’s Capital A/c.

Options

• ₹ 60,000

• ₹ 50,000

• ₹ 40,000

• ₹ 10,000

Answer 1

₹ 40,000

Explanation:

P, Q, R = Profit sharing ratio = 1 : 1 : 1

`1/3:1/3:1/3`

At the time of retirement of R

Goodwill in the books = ₹ 30,000

Goodwill of the firm = ₹ 1,50,000

Goodwill = 1,50,000 – 30,000 = 1,20,000

Net amount credited to R’s Capital A/c = `1,20,000xx1/3`

= ₹ 40,000