Multiple choice

X & Y share profits & losses as $1:2$. They agree to admit Z (who is also in business on his own) as a third partner. At the time of admission of Z goodwill was appearing in balance sheet at Rs.$14,000$ which was revalued at Rs.$18,000$. Z brings the following assets into the partnership: Goodwill- Rs.$6,000$ Furniture-Rs.$2,800$, Stock-Rs.$13,600$ After admission of Z, goodwill will appear at _______ in the balance sheet.

  1. Rs.$14,000$
  2. Rs.$18,000$
  3. Rs.$24,000$
  4. Rs.$26,000$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

When a new partner is admitted, the goodwill is revalued. The new value of goodwill (18,000) is brought into the books. However, the question asks for the value after admission, and the assets brought in include an additional 6,000 of goodwill. 18,000 + 6,000 = 24,000.

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