A, B and C are the partners sharing profits and losses in the ratio of 5: 3: 2. C retired and his capital balance after adjustments regarding Reserves, Accumulated profits / losses and gain / loss on revaluation was Rs. 2,50,000. C share was paid Rs. 3,00,000 in full of settlement. Afterwards D was admitted D. for 1 / 5th. (C.B.S.E. Sample Paper, 2017)

SOLUTION

C’s share of Goodwill = 3,00,000 – 2,50,000 = Rs. 50,000
Firm’s Goodwill = 50,000 x 10 / 2 = Rs. 2,50,000