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C brought ₹64,000 as goodwill in cash. The old partners retained 37.5% of it in the business and withdrew the balance. What will be the withdrawal?

Answer and explanation

Correct answer: ₹40,000

The amount retained in the business is calculated by applying the retention percentage to the cash goodwill brought by C. Retained amount = ₹64,000 × 37.5% = ₹64,000 × 3/8 = ₹24,000. The old partners withdraw the balance, so withdrawal = Total goodwill cash − Amount retained = ₹64,000 − ₹24,000 = ₹40,000. Therefore, option C is correct. Option A is only the amount retained in the business, not the withdrawal. Option D ignores the retention, while option B does not follow from the stated percentage. The calculation assumes that the balance is withdrawn as described.

Related tags

Goodwill WithdrawalRetained GoodwillAdmission Of PartnerGoodwill AccountingReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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