Question:
Sona, Mona and Raghav were partners in a firm sharing profits and losses in the ratio of 4 : 3 : 2. Raghav retired. The balance in Raghav’s capital account after making the necessary adjustments on account of reserves and revaluation of assets and liabilities was ₹2,20,000. Sona and Mona agreed to pay him ₹4,00,000 in full settlement of his claim. Raghav’s share of goodwill in the firm was:
Sona, Mona and Raghav were partners in a firm sharing profits and losses in the ratio of 4 : 3 : 2. Raghav retired. The balance in Raghav’s capital account after making the necessary adjustments on account of reserves and revaluation of assets and liabilities was ₹2,20,000. Sona and Mona agreed to pay him ₹4,00,000 in full settlement of his claim. Raghav’s share of goodwill in the firm was:
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Goodwill share of retiring partner = Final settlement amount – adjusted capital balance.
Updated On: Jul 19, 2025
- ₹2,20,000
- ₹1,80,000
- ₹4,00,000
- ₹40,000
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The Correct Option is B
Solution and Explanation
Amount paid to Raghav on retirement = ₹4,00,000
Balance in his capital account after adjustments = ₹2,20,000
Difference = Excess amount paid over capital = Raghav’s share of goodwill
$\Rightarrow$ Goodwill share = ₹4,00,000 – ₹2,20,000 = ₹1,80,000
Hence, Raghav’s share of goodwill = ₹1,80,000
Balance in his capital account after adjustments = ₹2,20,000
Difference = Excess amount paid over capital = Raghav’s share of goodwill
$\Rightarrow$ Goodwill share = ₹4,00,000 – ₹2,20,000 = ₹1,80,000
Hence, Raghav’s share of goodwill = ₹1,80,000
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