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A firm's capitalized value is ₹9,00,000 and its actual capital is ₹7,60,000. What is the value of the firm's goodwill?

Answer and explanation

Correct answer: ₹1,40,000

Goodwill = Capitalized value − Actual capital = ₹9,00,000 − ₹7,60,000 = ₹1,40,000. Therefore, option A is correct. Option B represents the actual capital, not the goodwill. In this method, remember that goodwill is the excess of capitalized value over actual capital.

Related tags

Goodwill AccountingCapitalized ValueActual CapitalPartnership AccountsNumerical ProblemReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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