Multiple choice

A,B & Care partners sharing profits and losses in the ration of $3:2:1$ C retires on a decided date and Goodwill of the firm is to be valued at $Rs.60,000$. Find the amount payable to retiring partner on account of goodwill.

  1. $Rs.30,000$
  2. $Rs.20,000$
  3. $Rs.10,000$
  4. $Rs.60,000$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

C's profit-sharing ratio is 1 out of a total ratio of 3 + 2 + 1 = 6. Therefore, C's share of goodwill is 1/6 x Rs. 60,000 = Rs. 10,000.

AI explanation

C's profit and loss sharing ratio is given as 1 out of the total 6 parts, so C holds a 1/6 share in the firm. The total goodwill of the firm is valued at Rs. 60,000. To find the amount payable to the retiring partner C, calculate 1/6 of Rs. 60,000, which results in Rs. 10,000.

Keep practicing — related questions