Question

X and Y are partners with capitals of RS.50,000 each. They admit Z as a partner of 1/4th share in the profits of the firm. Z bring in RS.80,000 as his share of capital. The Profit and Loss Account showed a credit balance of RS.40,000 as on date of admission of Z.
Given necressary Journal entries to record the goodwill.

Answer 1

Correct Answer - Hidden Goodwill-RS.1,00,000.
Hidden Goodwill `=(RS.80,000xx4//1)-(RS.50,000+RS.50,0000+RS.40,000+RS.80,000)`