Given Information:
- Partners A and B have a capital of 2600000 and 1800000 respectively.
- Partner C is admitted with a share of 1/5 in the profits of the firm.

To Find:
- Capital and Goodwill

Solution:

Step 1: Calculation of Total Capital
The total capital is the sum of the capital contributed by all the partners.
Total capital = Capital of A + Capital of B
Total capital = 2600000 + 1800000
Total capital = 4400000

Step 2: Calculation of C's Share in Profits
Since C is admitted with a share of 1/5 in the profits of the firm, we need to calculate the share of profits for C.
Share of profits for C = Total capital * Share of C
Share of profits for C = 4400000 * (1/5)
Share of profits for C = 880000

Step 3: Calculation of C's Capital
To calculate C's capital, we need to subtract C's share of profits from the total capital.
Capital of C = Total capital - Share of profits for C
Capital of C = 4400000 - 880000
Capital of C = 3520000

Step 4: Calculation of Goodwill
Goodwill can be calculated by subtracting the total capital from the sum of the capital and C's capital.
Goodwill = (Total capital + Capital of C) - Total capital
Goodwill = 3520000 - 4400000
Goodwill = -880000

Explanation:
- The total capital of the firm is calculated by adding the capital contributed by partners A and B.
- C's share in profits is calculated by multiplying the total capital by C's share.
- C's capital is calculated by subtracting C's share of profits from the total capital.
- Goodwill is calculated by subtracting the total capital from the sum of the capital and C's capital.
- In this case, the goodwill is negative, indicating that the value of the firm has decreased due to the admission of C as a partner.