Multiple choice

Vishal, a new partner with 1/6th share in the firm, brought Rs. 50,000 cash, Rs. 30,000 stock, Rs. 25,000 investment and Rs. 45,000 furniture as his share of capital and goodwill. Goodwill of the firm is valued at Rs. 30,000. What should be the amount credited to his capital account?

  1. Rs. 1,50,000

  2. Rs. 1,20,000

  3. Rs. 1,45,000

  4. Rs. 50,000

  5. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Total assets brought = 50,000 + 30,000 + 25,000 + 45,000 = 1,50,000. This includes capital and goodwill. Goodwill = 30,000 * (1/6) = 5,000. Capital = 1,50,000 - 5,000 = 1,45,000.

AI explanation

Vishal acquired a 1/6th share in the firm, so his share of the goodwill is calculated as 1/6 of the total firm goodwill of Rs. 30,000, which equals Rs. 5,000. Out of the total assets brought in (cash, stock, investments and furniture), Rs. 5,000 is credited to the goodwill account. The remaining amount, calculated as 50000 plus 30000 plus 25000 plus 45000 minus 5000, is credited to his capital account, resulting in Rs. 1,45,000.

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