Multiple choice

X and Y share profits and losses in the ratio of 2 : 1. They take Z as a partner and the new profit sharing ratio becomes 3 : 2 : 1. Z brings Rs. 4,500 as premium for goodwill. The full value of goodwill will be

  1. Rs. 4,500

  2. Rs. 18,000

  3. Rs. 27,000

  4. Rs. 24,000
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Z brings Rs. 4,500 as premium for goodwill. Z's share in new profits = 1/6 (ratio is 3:2:1). If Rs. 4,500 represents 1/6 of goodwill, then total goodwill = Rs. 4,500 × 6 = Rs. 27,000. This is based on the premium brought by the incoming partner representing their share of total goodwill.

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