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C is admitted to the firm for a 1/6 share of profit. The firm's total goodwill is ₹1,20,000, and C brings only ₹15,000 in cash for goodwill. What is the amount of unbrought goodwill?

Answer and explanation

Correct answer: ₹5,000

C’s share of goodwill is ₹1,20,000 × 1/6 = ₹20,000. Since C brings only ₹15,000 in cash, unbrought goodwill = ₹20,000 − ₹15,000 = ₹5,000. Remember that unbrought goodwill is the difference between the incoming partner’s share of goodwill and the amount actually brought in cash.

Related tags

Goodwill AccountingAdmission Of PartnerUnbrought GoodwillPartnership AccountsNumerical QuestionReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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