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Hidden goodwill

intermediate(ipc)course (no) (1460 Points)

08 June 2012

dheeraj & gopal are partners in a firm with capitals of 500000/- each. they admit deepak as a partner with 1/4 th share in the profits of firm. deepak brought 800000/- as his share of capital.the total capital of firm after deepak's admission will be 2000000/-.the amount of hidden goodwill brought by deepak will be

ans. is 300000/- but i cannot solve pl solve this sum with step by step.

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14 Replies

Vibhor Nanda (CA student) (59 Points)
Replied 08 June 2012

Umm..

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Vibhor Nanda (CA student) (59 Points)
Replied 08 June 2012

Thinking.. Thinkinggg :P

Vibhor Nanda (CA student) (59 Points)
Replied 08 June 2012

Actual way is.. Like see this question A & B are partners with capitals of Rs. 10,000 and Rs. 20,000.. And sharung profits equally. They admit C as their third partner with 1/4th share of profits of firm on payment of Rs.12,000. The amount of hidden goodwill is_______ Solution= Total capital of firm will be 12,000 x 4/1 =48,000 Capital brought--10,000+20,000+12,000=42,000 Hidden goodwill will be -- 48,000-42,000=6,000 I think the question you gave is wrong as the answer can't be 3,00,000 at any cost

prasad (CA Final Bcom(Taxation) Sr Audit Team Leader ) (71 Points)
Replied 08 June 2012

Total capital after admission 2000000

1/4 share 500000

Capital brought 800000

hidden goodwill (8-2) 300000

1 Like

prasad (CA Final Bcom(Taxation) Sr Audit Team Leader ) (71 Points)
Replied 08 June 2012

8-5=3lac

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Tejaswi Kasturi (student-cpt) (427 Points)
Replied 08 June 2012

deepak's share is .25. he is bringing 8,00,000 towards his capital. to claculate goodwill we have to calculate the capital which would make the profit sharing ratio proportionate to capital brought by deepak. so capital of the firm must be 4*8,00,000 ( for 1/4th share capital is 8,00,000 so total capital is 4*8,00,000) = 32,00,000. But the total capital of the firm is only 20,00,000. so the remaining amount of capital is hidden goodwill. it will be 12,00,000. now deepak should pay his share of goodwill. so he pays 1/4(12,00,000) towards goodwill from his capital of 8,00,000. so he pays 3,00,000 towards goodwill and his capital A/c will be credited with 5,00,000.

Vibhor Nanda (CA student) (59 Points)
Replied 08 June 2012

not Hidden goodwill of firm!! You asked hidden goodwill of deepak..sh*t.. I am so sorry

Vibhor Nanda (CA student) (59 Points)
Replied 08 June 2012

o_O

Nikita (CA) (74 Points)
Replied 08 June 2012

i wanna knw abt d best buk for cost n fm ....pls helppppppp!!

(Guest)

Agreed with tejaswari kasturi.

ans 300,000

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C.A SUVAJIT SAHU (CA ( In Practice )) (708 Points)
Replied 09 June 2012

Originally posted by : Nikita
	i wanna knw abt d best buk for cost n fm ....pls helppppppp!!

hi nikita....

cost -----Ravi M kishore,compilor/practice manual

FM-------compilor/practice manual.....

1 Like

MOHD ANZAR ALI (EMPLOYEE) (78 Points)
Replied 09 June 2012

since firms capital already define hence produre as follow

step -1 find firms capital on old partners share basis

2000000

step -2

find firms capital on incoming partners share basis

1/4 = 800000

then firms capital = 3200000

hidden godwill of firms = step - (2) - (1)

3200000 - 200000

= 1200000

now deepak has to bring his share of goodwill = 1200000/4 = 300000

and deepak capital will be 800000-300000 = 500000

capital a/c of partners as

opning capital =500000

additional capital = 250000

total of old partners = 750000 each

and deepak capital = 500000

hence firms capital 2000000

it may be assume adjustmen of good are withdraw by each old partners

Bhavesh A. Manani (CA Final ) (35 Points)
Replied 09 June 2012

Solution given by Tejaswi Kasturi is perfect.

CA Sakshi Sankhla Tiwari (Taxation & Audit Manager) (44 Points)
Replied 10 June 2012

Originally posted by : swati ghosh
	dheeraj & gopal are partners in a firm with capitals of 500000/- each. they admit deepak as a partner with 1/4 th share in the profits of firm. deepak brought 800000/- as his share of capital.the total capital of firm after deepak's admission will be 2000000/-.the amount of hidden goodwill brought by deepak will be ans. is 300000/- but i cannot solve pl solve this sum with step by step.

You should go with solution given by Mr. Prasad and thanks him for the same. From total capital of the firm get the share of new partner(1/4th of 20,00,000) then deduct the same from what he brought(8,00,000-5,00,000) you'll find hidden goodwill.