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The total goodwill is ₹85,000 and the partners’ new profit-sharing ratio is 3:1:1. What is the goodwill attributable to the third partner’s share?

Answer and explanation

Correct answer: ₹17,000

The total parts in the new ratio 3:1:1 are 5. The third partner’s share is 1/5. Therefore, goodwill attributable to this share = ₹85,000 × 1/5 = ₹17,000. Option D incorrectly uses a 1/2 share, which is not indicated by the ratio. Exam tip: Multiply total goodwill by the partner’s ratio share, that is, the partner’s part divided by the total parts.

Related tags

AccountancyGoodwill AccountingNew Profit Sharing RatioAdmission Of PartnerRatio CalculationReconstitution Admission Of A PartnerClass 12 Mcq

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