Question:
Rohit, Udit and Mohit were partners in a firm sharing profits in the ratio of 3 : 2 : 1. Mohit retired. The balance in his capital account after making the necessary adjustments on account of reserves and revaluation of assets and liabilities was Rs.1,80,000. Rohit and Udit agreed to pay him Rs.2,00,000 in full settlement of his claim. Mohit’s share of goodwill in the firm was:
Rohit, Udit and Mohit were partners in a firm sharing profits in the ratio of 3 : 2 : 1. Mohit retired. The balance in his capital account after making the necessary adjustments on account of reserves and revaluation of assets and liabilities was Rs.1,80,000. Rohit and Udit agreed to pay him Rs.2,00,000 in full settlement of his claim. Mohit’s share of goodwill in the firm was:
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Goodwill is often paid as compensation when the retiring partner’s claim exceeds the balance in their capital account.
Updated On: Jan 29, 2025
- Rs.1,80,000
- Rs.2,00,000
- Rs.40,000
- Rs.20,000
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The Correct Option is D
Solution and Explanation
The amount payable to Mohit exceeds the balance in his capital account by:
\[
Rs.2,00,000 - Rs.1,80,000 = Rs.20,000
\]
This excess amount represents Mohit’s share of goodwill in the firm.
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