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X and Y share profits and losses in the ratio of 2:1. They take Z as a partner and the new profit sharing ratio becomes 3:2:1. Z brings Rs. 4,500 as premium for goodwill. The full value of goodwill will be
- a)Rs. 4,500
- b)Rs. 18,000
- c)Rs. 27,000
- d)Rs. 24,000
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
X and Y share profits and losses in the ratio of 2:1. They take Z as a...
To solve this problem, we need to understand the concept of goodwill and how it is valued when a new partner is admitted into a partnership.
Goodwill is an intangible asset that represents the reputation, customer base, and other non-physical assets of a business. When a new partner is admitted into a partnership, they are essentially buying a share of the goodwill of the existing partners. The value of goodwill is determined by the mutual agreement between the partners. In this case, Z is bringing Rs. 4,500 as premium for goodwill, which means that Z is buying a share of the goodwill for that amount.
Let's break down the problem step by step:
Step 1: Calculate the existing profit sharing ratio between X and Y
According to the given information, X and Y share profits and losses in the ratio of 2:1. This means that out of a total of 3 parts, X gets 2 parts and Y gets 1 part.
Step 2: Determine the new profit sharing ratio after Z joins the partnership
The new profit sharing ratio becomes 3:2:1. This means that out of a total of 6 parts, X gets 3 parts, Y gets 2 parts, and Z gets 1 part.
Step 3: Calculate the amount of goodwill brought in by Z
Z brings Rs. 4,500 as premium for goodwill. This means that Z is buying a share of the goodwill for that amount. Since Z's share in the new profit sharing ratio is 1 part out of 6, we can calculate the full value of goodwill using the following formula:
Full Value of Goodwill = Amount of Premium / Share of New Partner
Full Value of Goodwill = Rs. 4,500 / (1/6) = Rs. 27,000
Therefore, the full value of goodwill is Rs. 27,000.
Goodwill is an intangible asset that represents the reputation, customer base, and other non-physical assets of a business. When a new partner is admitted into a partnership, they are essentially buying a share of the goodwill of the existing partners. The value of goodwill is determined by the mutual agreement between the partners. In this case, Z is bringing Rs. 4,500 as premium for goodwill, which means that Z is buying a share of the goodwill for that amount.
Let's break down the problem step by step:
Step 1: Calculate the existing profit sharing ratio between X and Y
According to the given information, X and Y share profits and losses in the ratio of 2:1. This means that out of a total of 3 parts, X gets 2 parts and Y gets 1 part.
Step 2: Determine the new profit sharing ratio after Z joins the partnership
The new profit sharing ratio becomes 3:2:1. This means that out of a total of 6 parts, X gets 3 parts, Y gets 2 parts, and Z gets 1 part.
Step 3: Calculate the amount of goodwill brought in by Z
Z brings Rs. 4,500 as premium for goodwill. This means that Z is buying a share of the goodwill for that amount. Since Z's share in the new profit sharing ratio is 1 part out of 6, we can calculate the full value of goodwill using the following formula:
Full Value of Goodwill = Amount of Premium / Share of New Partner
Full Value of Goodwill = Rs. 4,500 / (1/6) = Rs. 27,000
Therefore, the full value of goodwill is Rs. 27,000.
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X and Y share profits and losses in the ratio of 2:1. They take Z as a...
3+2+1=6. so...4500(6)= 27,000
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X and Y share profits and losses in the ratio of 2:1. They take Z as a partner and the new profit sharing ratio becomes 3:2:1. Z brings Rs. 4,500 as premium for goodwill. The full value of goodwill will bea)Rs. 4,500b)Rs. 18,000c)Rs. 27,000d)Rs. 24,000Correct answer is option 'C'. Can you explain this answer?
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X and Y share profits and losses in the ratio of 2:1. They take Z as a partner and the new profit sharing ratio becomes 3:2:1. Z brings Rs. 4,500 as premium for goodwill. The full value of goodwill will bea)Rs. 4,500b)Rs. 18,000c)Rs. 27,000d)Rs. 24,000Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about X and Y share profits and losses in the ratio of 2:1. They take Z as a partner and the new profit sharing ratio becomes 3:2:1. Z brings Rs. 4,500 as premium for goodwill. The full value of goodwill will bea)Rs. 4,500b)Rs. 18,000c)Rs. 27,000d)Rs. 24,000Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for X and Y share profits and losses in the ratio of 2:1. They take Z as a partner and the new profit sharing ratio becomes 3:2:1. Z brings Rs. 4,500 as premium for goodwill. The full value of goodwill will bea)Rs. 4,500b)Rs. 18,000c)Rs. 27,000d)Rs. 24,000Correct answer is option 'C'. Can you explain this answer?.
X and Y share profits and losses in the ratio of 2:1. They take Z as a partner and the new profit sharing ratio becomes 3:2:1. Z brings Rs. 4,500 as premium for goodwill. The full value of goodwill will bea)Rs. 4,500b)Rs. 18,000c)Rs. 27,000d)Rs. 24,000Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about X and Y share profits and losses in the ratio of 2:1. They take Z as a partner and the new profit sharing ratio becomes 3:2:1. Z brings Rs. 4,500 as premium for goodwill. The full value of goodwill will bea)Rs. 4,500b)Rs. 18,000c)Rs. 27,000d)Rs. 24,000Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for X and Y share profits and losses in the ratio of 2:1. They take Z as a partner and the new profit sharing ratio becomes 3:2:1. Z brings Rs. 4,500 as premium for goodwill. The full value of goodwill will bea)Rs. 4,500b)Rs. 18,000c)Rs. 27,000d)Rs. 24,000Correct answer is option 'C'. Can you explain this answer?.
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