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A, B and C share profits in the ratio 4:4:2. A dies, and the firm’s goodwill is valued at ₹1,25,000. How much will A’s executor receive for goodwill?

Answer and explanation

Correct answer: ₹50,000

The total of the old profit-sharing ratio is 4 + 4 + 2 = 10, so A’s share is 4/10. A’s executor is entitled to A’s share of the firm’s goodwill: ₹1,25,000 × 4/10 = ₹50,000.

Related tags

GoodwillDeath Of A PartnerGoodwill SettlementReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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