Goodwill Accounting

Correct answer: A. New partner's capital or current account

When cash is not brought, goodwill is adjusted through the new partner's account. Old partners are credited in sacrificing ratio.

Correct answer: A. ₹25,000

The governing concept is super profit, which measures the excess of actual or maintainable average profit over normal profit. The formula is: Super Profit = Actual Average Profit − Normal Profit. Substituting the given amounts gives ₹95,000 − ₹70,000 = ₹25,000. Therefore option A is correct. Option B is merely the normal profit used as the benchmark, while option C is the complete actual average profit and not the excess over normal return. Option D incorrectly adds the two figures. Since super profit measures only the surplus earned above the normal level, subtraction—not addition or selection of either original amount—is required.

Correct answer: A. ₹30,000

When the incoming partner brings goodwill in cash, the premium attributable to that partner is calculated by applying the partner’s profit-sharing fraction to the firm’s total goodwill. The formula is: Goodwill Premium = Total Firm Goodwill × New Partner’s Share. Therefore, ₹1,50,000 × 1/5 = ₹30,000. Option A is correct. This amount compensates the existing partners for the future profit share surrendered to the new partner. Option B is the entire goodwill of the firm, option C uses one-half instead of one-fifth, and option D represents four-fifths. None of those amounts equals the required one-fifth share.

Correct answer: A. ₹30,000

The governing concept is that the goodwill premium brought by an incoming partner is distributed among the old partners in their sacrificing ratio. A and B sacrifice in the ratio 2:1, so the total number of ratio parts is 2 + 1 = 3. A has two of these three parts. Therefore, A’s share is calculated as ₹45,000 × 2/3 = ₹30,000. B receives the remaining ₹15,000. Hence, option A is correct. Option B is B’s share, not A’s. Option C would result from dividing the premium equally, which ignores the stated sacrificing ratio. Option D gives the whole premium to A and fails to credit B for the sacrifice made.

Correct answer: B. ₹11,000

Deficiency in goodwill is the amount required under the agreement minus the amount actually brought by the incoming partner. Here, deficiency = ₹96,000 − ₹85,000 = ₹11,000. Therefore, the new partner has brought ₹11,000 less than the required goodwill contribution, making option B correct. Option A results from an incorrect subtraction, option C is merely the amount brought and does not measure the shortfall, and option D incorrectly adds the two amounts. In partnership admission accounting, this deficiency is generally adjusted according to the applicable agreement and accounting treatment, but that later adjustment does not change the amount of the deficiency calculated here.