Question

David and Garry are partners in a firm with capitals of Rs. 90,000 and Rs. 80,000 respectively. Zenith brings Rs.70,000 as his capital for 1/4th share in profits. Zenith’s share of goodwill will be:

(a) Rs. 34,000.

(b) Rs. 29,000.

(c) Rs.10,000.

(d) Rs.14,000.

Answer 1

Correct answer is (c) Rs.10,000.

Explanation: David and Garry are partners in a firm with capitals of Rs. 90,000 and Rs. 80,000 respectively. Zenith brings Rs.70,000 as his capital for 1/4th share in profits. Zenith’s share of goodwill will be: Rs.10,000.