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This section includes InterviewSolutions, each offering curated multiple-choice questions to sharpen your knowledge and support exam preparation. Choose a topic below to get started.
| 10151. |
Ashish, Aakash and Amit are partners sharing profits and losses equally. The Balance Sheet as at 31st March, 2018 was as follows: The partners decided to share profits in the ratio of 2 ; 2 : 1 w.e.f. 1st April, 2018. They also decided that: (i) Value of stock to be reduced to ₹ 1,25,000. (ii) Value of machinery to be decreased by 10%. (iii) Land and Building to be appreciated by ₹ 62,000. (iv) Provision for Doubtful Debts to be made @ 5% on Sundry Debtors. (v) Aakash was to carry out reconstitution of the firm at a remuneration of ₹ 10,000. Pass necessary journal entries to give effect to the above. |
| Answer» TION account CREDITED to ASHISH Account =2,666Revaluation account credited to AAKASH Account=2,667Revaluation account credited to Amit Account = 2,667Explanation: | |
| 10152. |
Nitin, Tarun and Amar are partners sharing profits equally and decide to share profits in the ratio of 2 : 2 : 1 w.e.f . 1st April, 2018. The extract of their Balance Sheet as at 31st March, 2018 is as follows: Pass the journal entries in each of the following situations: (i) When its Market Value is not given; (ii) When its Market Value is given as ₹ 4,00,000; (iii) When its Market Value is given as ₹ 4,24,000; (iv) When its Market Value is given as ₹ 3,70,000; (v) When its Market Value is given as ₹ 3,10,000. |
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Answer» v) Out of SUNDRY Creditors, ₹ 10,000 is not payable.(vi) Goodwill is to be valued at 2 years PURCHASE of last 3 years PROFITS. Profits being for2016-17 – ₹ 50,000 (Loss);2015-16 – ₹2,50,000 and2014-15 – ₹ 2,50,000.(vii) C was to CARRY out the WORK for reconstituting theHOPE THIS HELPS ❤️PLEASEMARK AS BRAINLIEST ❤️❤️ |
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| 10153. |
X, Y and Z who are presently sharing profits and losses in the ratio of 5 : 3 : 2 decide to share future profits and losses in the ratio of 2 : 3 : 5. Give the journal entry to distribute Workmen Compensation Reserve of ₹ 1,20,000 at the time of change in profit-sharing ratio, when there is a claim of ₹ 80,000 against it. |
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Answer» n: Journal Particulars Debit Rs. Credit Rs. Workmen Compensation Reserve A/c Dr. 40,000 To X's CAPITAL A/c 20,000 To Y's Capital A/c 12,000 To Z's Capital A/c 8,000 (Being adjustment of balance in workmen COMPOSITION reserve account in OLD ratio) Working Notes: CALCULATION of Share (Workmen Compensation Reserve) Credited to X's share = 40,000 x = 20,000Credited to Y's share = 40,000 x = 12,000Credited to Z's share = 40,000 x = 8000 |
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| 10154. |
A and B are partners in a firm sharing profits in the ratio of 4 : 1 . They decided to share future profits in the ratio of 3 : 2 w.e.f. 1st April,2018 . On that day, Profit and Loss Account showed a debit balance of ₹ 1,00,000.Pass journal entry to give effect to the above. |
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Answer» n: Journal Date Particulars L.F. Debit Rs. Credit Rs. A's CAPITAL A/c DR. 80,000 B's Capital A/c Dr. 20,000 To Profit and LOSS A/c 1,00,000 (Being Profit and Loss distributed) |
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| 10155. |
A and B are partners in a firm sharing profits in the ratio of 2 : 1 . They decided with effect from 1st April, 2017, that they would share profits in the ratio of 3 : 2 . But, this decision was taken after the profit for the year 2017-18 amounting to ₹ 90,000 was distributed in the old ratio. Value of firm’s goodwill was estimated on the basis of aggregate of two years profits preceding the date decision became effective. The profits for 2015-16 and 2016-17 were ₹ 60,000 and ₹ 75,000 respectively. It was decided that Goodwill Account will not be opened in the books of the firm and necessary adjustment be made through Capital Accounts which, on 31st March, 2018 stood, at ₹ 1,50,000 for A and ₹ 90,000 for B. Pass necessary journal entries and prepare Capital Accounts. |
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Answer» n: JournalParticulars Debit Rs. Credit Rs. A's Capital A/c Dr. 6,000 To B's Capital A/c 6,000 (Being ADJUSTMENT of profit for 2016-17 on change in profit sharing ratio) B's Capital A/c Dr. 9,000 To A's Capital A/c 9,000 (Being adjustment of goodwill made on change in profit sharing ratio) Partner's Capital Accounts Dr Cr Particulars A B Particulars A B To B's Capital A/c 6,000 By Balance b/d 1,50,000 90,000(Adjustment of profit) By A's Capital A/cTo A's Capital A/c 9,000 (Adjustment Profit)(Adjustment of Goodwill) To Balance c/d 6,000 1,53,000 87,000 By B's Capital A/c 9,000 (Adjustment of Goodwill) 1,59,000 96,000 1,59,000 96,000Working NOTES: 1. CALCULATION of Sacrificing (or Gaining) Ratio Old Ratio (A and B) = 2 : 1 NEW Ratio (A and B) = 3 : 2 Sacrificing (or Gaining) Ratio = 0 d Ratio - New Ratio A's Ratio = = = (Sacrifice) B's Ratio = = = (Gain) 2. Adjustment of Profits for 2016-17 Debited to A's Capital Account = 90,000 x (Sacrifice)= 6, 000 Credited to B's Capital Account =90,000 x (Gain)= 36,000 3. Calculation of New Goodwill Goodwill = Profit of (2016-17) + Profit of (2017-18) = 60,000 + 75,000 = Rs.1,35,000 4. Adjustment of Goodwill Debited to A's Capital Al c= 1, 35,000 x (Sacrifice) = 9, 000 Debited to B's Capital A /c = 1, 35,000 x (Gain)=9,000 |
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| 10156. |
X, Y and Z are partners sharing profits and losses in the ratio of 5 : 3 : 2 . From 1st April, 2018, they decided to share profits and losses equally. The Partnership Deed provides that in the event of any change in the profit-sharing ratio, the goodwill should be valued at two years purchase of the average profit of the preceding five years . The profits and losses of the preceding years are: You are required to calculate goodwill and pass journal entry. |
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Answer» n: Journal Particulars Debit Rs. CREDIT Rs. Y's Capital A/c Dr. 3,000 Z's Capital A/c Dr. 12,000 To X's Capital A/c 15,000 (Being amount of goodwill adjusted on change in PROFIT sharing ratio) Working Notes: 1. CALCULATION of Sacrificing (or Gaining) Ratio OLD Ratio ( X. Y and Z) = 5 :3 :2 New Ratio ( X, Y and Z) = 1 : 1 : 1 Sacrificing (or Gaining) Ratio = Old Ratio - New Ratio X' s Share= = = (Sacrifice) Y's Share= = = (Gain) Z's Share = = = (Gain) 2. Calculation of Goodwill AVERAGE profit = = 45, 000 Goodwill = Average Profit x Number of Year' s Purchase Goodwill = 45,000 x 2 = 90,0003. Adjustment of Goodwill Credited to X's Capital A/c =90,000 x (sacrifice) =15,000 Debited to Y's Capital A/c =90,000 x ( gain) = 13, 000 Debited to Z's Capital A/c =90,000 x (gain) = 12, 000 |
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| 10157. |
X, Y and Z are sharing profits and losses in the ratio of 5 : 3 : 2. With effect from 1st April, 2018, they decide to share profits and losses equally. Calculate each partner’s gain or sacrifice due to the change in ratio. |
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Answer» I'm SORRY I don't know.. please seek HELP from someone ELSE..All the best for your UPCOMING exams, rock it!Explanation:May god BLESS you. |
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| 10158. |
A drew a bill of ₹ 1,000 on B for 3 months which was duly accepted by the latter. A endorsed the bill to C in full payment of his own acceptance to C for a like amount. C endorsed the bill to B. |
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Answer» it is very HARD....,............. |
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| 10159. |
X and Y are in partnership sharing profits in the ratio of 2 : 3 . With effect from 1st April, 2018, they agreed to share profits in the ratio f 1 : 2 . For this purpose, goodwill of the firm is to be valued at two years purchase of the average profit of last three years , which were ₹ 1, 50,000; ₹ 1,60,000 and ₹ 2,00,000 respectively. The reserves appear in the books at ₹ 1,10,000. Partners decide to continue showing Reserves in the books . You are required to give effect to the change by passing a single journal entry. |
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Answer» ,00,000 respectively. The reserves appear in the BOOKS at ₹ 1,10,000. PARTNERS decide to continue showing Reserves in the books . You are required to give effect to the change by PASSING a single JOURNAL entry.HOPE THIS HELPS ❤️PLEASEMARK AS BRAINLIEST ❤️❤️ |
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| 10160. |
A, B and C who are presently sharing profits and losses in the ratio of 5 : 3 : 2 decide to share future profits and losses in the ratio of 2 : 3 : 5 . Give the journal entry to distribute Investments Fluctuation Reserve of ₹ 20,000 at the time of change in profit-sharing ratio, when investment (market value ₹ 95,000) appears in the books at ₹ 1,00,000. |
| Answer» E YOUR ANSWER IS6:4;8Hope this HELPS | |
| 10161. |
A, B and C who are presently sharing profits and losses in the ratio of 5 : 3 : 2 decide to share future profits and losses in the ratio of 2 : 3 : 5 . Give the journal entry to distribute Workmen Compensation Reserve of ₹ 1,20,000 at the time of change in profit-sharing ratio, when: (i) no information is given. (ii) there is no claim against it. |
| Answer» EI don't KNOW ASK ANYONE elseor ask to GOOGLE | |
| 10162. |
X and Y are partners in a firm sharing profits and losses in the ratio of 3 : 2 . With effect from 1st April, 2018, they decided to share future profits equally. On the date of change in the profit-sharing ratio, the Profit and Loss Account showed a credit balance of ₹ 1,50,000. Record the necessary journal entry for the distribution of the balance int he Profit and Loss Account immediately before the change in the profit-sharing ratio. |
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Answer» TE YOUR ANSWER ISAccount showed a credit balance of ₹ 1,50,000. Record the necessary JOURNAL entry for the DISTRIBUTION of the balance int he Profit and LOSS Account immediately before the change in the profit-sharing ratio.HOPE THIS HELPS ❤️PLEASE MARK AS BRAINLIEST ❤️❤️ |
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| 10163. |
X, Y are partners sharing profits in the ratio of 2 : 1 . On 31st March, 2018, their Balance Sheet showed General Reserve of ₹ 60,000. It was decided that in future they will share profits and losses in the ratio of 3 : 2 . Pass necessary journal entry in each of the following alternative cases: (i) If General Reserve is not to be shown in the new Balance Sheet. (ii) If General Reserve is to be shown in the new Balance Sheet. |
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Answer» i) If General RESERVE is not to be shown in the new Balance Sheet.(II) If General Reserve is to be shown in the new Balance Sheet.HOPE THIS HELPS ❤️PLEASEMARK AS BRAINLIEST ❤️❤️ |
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| 10164. |
X, Y and Z are partners sharing profits and losses in the ratio of 5 : 3 : 2 , decided to share future profits and losses equally with effect from 1st April, 2018. On that date , the goodwill appeared in the books at ₹ 12,000. But it was revalued at ₹ 30,000. Pass journal entries assuming that goodwill will not appear in the books of account. |
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Answer» tion:. On that DATE , the GOODWILL appearedjournal entries assuming thatratio of 5 : 3 : 2 , decided to share FUTURE |
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| 10165. |
X, Y and Z who are presently sharing profits and losses in the ratio of 5 : 3 : 2 decide to share future profits and losses in the ratio of 2 : 3 : 5 . with effect from 1st April, 2018. Workmen Compensation Reserve appears at ₹ 1,20,000 in the Balance Sheet as at 31st March, 2018 and Workmen Compensation Claim is estimated at ₹ 1,50,000. Pass journal entries for the accounting treatment of Workmen Compensation Reserve. |
| Answer» N: Journal SR. No. Particulars Debit Its. Credit Rs. (i) Workmen Compensation Reserve A/c DR. 1,20,000 Revaluation A/c Dr. 30,000 To Provision for W.C. Claim A/c 1,50,000 (Being provision CREATED and shortfall charged to Revaluation account) (II) X's Capital A/c Dr. 15,000 Y's Capital A/c Dr. 9,000 Z's Capital A/c Dr. 6,000 To Revaluation A/c 30,000 (Being loss on revaluation transferred to Partner's Capital account) | |
| 10166. |
A, B and C shared profits and losses in the ratio of 3 : 2 : 1 respectively. With effect from 1st April, 2018, they agreed to share profits equally. The goodwill of the firm was valued at ₹ 18,000. Pass necessary Journal entries when: (a) Goodwill Account is not opened; and (b) Goodwill Account is opened. |
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Answer» hey AGREED to SHARE profits equally. The GOODWILL of the firm was valued at ₹ 18,000. Pass necessary Journal ENTRIES when:(a) Goodwill Account is not opened; and(b) Goodwill Account is openedHOPE THIS HELPS ❤️PLEASEMARK AS BRAINLIEST ❤️❤️❤️FOLLOW ME |
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| 10167. |
On 20th March, 2018, Naresh sold goods to Kailash to the vlaue of ₹ 1,250, taking a bill at 3 months for the amount. On maturity, the bill was dishonoured. Naresh paid ₹ 10 as noting charges. On 1st July, Kailash cleared his account by paying ₹ 1,260. Make the entries in the books of both the parties to record the above transactions. |
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Answer» noting charges. On 1ST JULY, Kailash CLEARED his account by paying ₹ 1,260. |
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| 10168. |
Jai and Raj are partners sharing profits in the ratio of 3 : 2 . With effect from 1st April, 2018, they decided to share profits equally. Goodwill appeared in the books at ₹ 25,000 . As on 1st April, 2018, it was valued at ₹ 1,00,000 . They decided to carry goodwill in the books of the firm. Pass the journal entry giving effect to the above. |
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Answer» TE YOUR ANSWER ISinterest is 15%. The NET PROFITS for the LAST 3 years were ₹ 30,000; ₹ 36,000 and ₹ 42,000. Goodwill is to be valued at 2 years purchase of the last 3 years super profits. CALCULATE the goodwill of the firm.HOPE THIS HELPS ❤️PLEASE MARK AS BRAINLIEST ❤️❤️FOLLOW ME |
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| 10169. |
Mandeep, Vinod and Abbas are partners sharing profits and losses in the ratio of 3 : 2 : 1. From 1st April, 2018, they decided to share profits and losses equally. The Partnership Deed provides that in the event of any change in the profit-sharing ratio, the goodwill shall be valued at three years purchase of the average profit of last five years . The profits and losses of the past five years are: Profit – Year ended 31st March, 2014 – ₹ 1,00,000; 2015 – ₹ 1,50,000; 2017 – ₹ 2,00,000; 2018 – ₹ 2,00,000; Loss – Year ended 31st March, 2016 – ₹ 50,000. Pass the journal entries showing the working. |
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Answer» – Year ended 31st March, 2014 – ₹ 1,00,000; 2015 – ₹ 1,50,000; 2017 – ₹ 2,00,000; 2018 – ₹ 2,00,000;LOSS – Year ended 31st March, 2016 – ₹ 50,000.Pass the journal entries showing the working.HOPE it's helpMark as brainliest ❤️Follow me |
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| 10170. |
A, B and C are partners sharing profits and losses in the ratio of 5 : 4 : 1. Calculate new profit-sharing ratio, sacrificing ratio and gaining ratio in each of the following cases: Case 1. C acquires 1/5th share from A. Case 2. C acquires 1/5th share equally form A and B. Case 3. A, B and C will share future profits and losses equally. Case 4. C acquires 1/10th share of A and 1/2 share of B. |
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Answer» n:Calculation of New Profit Sharing RATIO CASE 1: C acquires 115th Share from A. Given Old Ratio between A :B: C. 5 : 4: 1 C acquires TH from A A's sacrifice = A= = = B = C = = = Case.2 : C acquires 1/56 Share equally from A and B. Given Old Ratio A :B: C. 5 : 4:1 C acquires th share equally from A and B. A's sacrifice = B's sacrifice = C's gain = A = = B = = C = = = A : B: C -= 4: 3 : 3 Case: 3 A, B and C will share future profits and losses equally. Given: Old Ratio A:B:C = 5:4:1 New Ratio A:B:C = 1: 1 :1 A = = = (Sacrifice) B = = = (Sacrifice) C = = = (gain)Case: 4 C acquires 1/106 Share of A and 1/2 share of B. Given Old Ratio A:B:C = 5:4:1 A's sacrifice to C = = B's sacrifice to C = = C's gain = = A= = = B = = = C = = = A:B:C = 9:4:7 |
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| 10171. |
X draws on Y a bill for ₹ 4,000 which was duly accepted by Y. Y meets the bill on its due date. Show what entries would be passed in the books of X under each of the following circumstances: (a) If X retains the bill till due date. (b) If X discounts the same with his banker paying ₹ 100 for discount. (c) If X endorses the same to his creditor Z in full settlement of his debt of ₹ 4,080. (d) If X sends the bill to his banker for collection the next day. |
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Answer» X draws on Y a bill for ₹ 4,000 which was duly accepted by Y,Y meets the bill on its due date. Show what entries would be PASSED in the books of X under each of the following circumstances. |
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| 10172. |
A and B are sharing profits and losses equally. With effect from 1st April, 2018, they agree to share profits in the ratio of 4 : 3. Calculate individual partner’s gain or sacrifice due to the change in ration. |
| Answer» N:Old Ratio (A and B) = 1 : 1 New Ratio (A and B) = 4 : 3 Sacrificing Ratio (or Gaining)=Old Ratio - New Ratio A's Share= = = (Gain)B's Share = = = (SACRIFICE)∴ A's Gain = 1/14 and B's Sacrifice = 1/14 | |
| 10173. |
Rajan and Rajani are partners in a firm. Their capitals were Rajan ₹ 3,00,000; Rajani ₹ 2,00,000. During the year 2017-18, the firm earned a profit of ₹ 1,50,000. Calculate the value of goodwill of the firm by capitalisation of super profit assuming that the normal rate of return is 20%. |
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Answer» n:Goodwill = Super PROFIT X Super Profit = Average Profit - Normal Profit Average Profit = 1,50,000 (given) Normal Profit = CAPITAL EMPLOYED x Normal RATE of Return = (3,00,000+2,00,000) x 20% = 1, 00,000 Super Profit = 1,50, 000 - 1, 00, 000 = 50,000 Goodwill = 50, 000 x = 2, 50 , 000 |
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| 10174. |
A business has earned average profit of ₹ 4,00,000 during the last few years and the normal rate of return in similar business is 10%. Find value of goodwill by: (i) Capitalisation of Super Profit Method, and (ii) Super Profit Method if the goodwill is valued at 3 years purchase of super profits. Assets of the business were ₹ 40,00,000 and its external liabilities ₹ 7,20,000. |
| Answer» N:Average Profit = Rs.4,00,00 NORMAL Rate of RETURN = 10% (i) Goodwill by Capitalisation of super profit CAPITAL Employed = Assets - External Liabilities = 40,00,000 - 7,20,000 = Rs.32,80,000 Normal Profit = Capital Employed x Normal Rate of Return = 32, 80, 000 x = 3,28,000 Super Profit = Actual Profit - Normal Profit = 4,00.000 3,28,000 = Rs.72,000 Goodwill = Super Profits x Goodwill = 72, 000 x = Rs.7,20,000 (ii) Super Profit Method if the goodwill is valued at 3 years purchase of super profits Goodwill = Super Profits x Number of Years of Purchase = 72, 000 x 3 = 2,16,000 Therefore, Goodwill is valued at Rs.2,16,000 | |
| 10175. |
From the following information, calculate value of goodwill of the firm by applying Capitalisation Method: Total Capital of the firm ₹ 16,00,000. Normal rate of return 10%. Profit for the year ₹ 2,00,000. |
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Answer» n:Goodwill = Capitalised Value of PROFIT - Actual Capital Capitalised Value of Profit = = =20,00,000 TOTAL Capital =16,00,000 Goodwill = 20, 00, 000 - 16, 00, 000 = 4, 00, 000 |
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| 10176. |
From the following information, calculate value of goodwill of the firm: (i) At three years purchase of Average Profit. (ii) At three years purchase of Super Profit. (iii) On the basis of Capitalisation of Super Profit. (iv) On the basis of Capitalisation of Average profit. Information: (a) Average Capital Employed is ₹ 6,00,000. (b) Net Profit/(Loss) of the firm for the last three years ended are: 31st March, 2108 – ₹ 2,00,000, 31st March, 2107 – ₹ 1,80,000, and 31st March, 2106 – ₹ 1,60,000. (c) Normal Rate of Return in similar business is 10%. (d) Remuneration of ₹ 1,00,000 to partners is to be taken as charge against profit. (e) Assets of the firm (excluding goodwill, fictitious assets and not-trade investments) is ₹ 7,00,000 whereas Partners Capital is ₹ 6,00,000 and Outside Liabilities ₹ 1,00,000. |
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Answer» n:(1) GoodwiII = Average Profit x Numbers of Years Purchase Goodwill = 80, 000 x 3 = 2, 40, 000 (2) Goodwill = Super Profit x Nu tubers of Years Purchase Goodwill = 20, 000 x 3 = 60, 000(3) Goodwill = Super Profit x Goodwill = 20, 000 x " = 2 00 000 (4) Goodwill = Capitalised Value - Net ASSET Goodwill = 8,00,000 - 6,00,000 = 2,00,000 WORKING Notes: Calculation Super Profits Average Profit - Average Profit = Average Profit = 1,80, 000 Capital employed = Total Assets - OUTSIDE liabilities Capital employed = Rs.7,00,000 - Rs.1,00,000 = Rs.6,00,000 Normal Profit= Capital Employed x Normal Profit = 6, 00, 000 x = 60,000 Super Profit = Average Profit (Adjusted) - Normal Profit Super Profit = Rs.80,000 - Rs.60,000 = Rs.20,000 |
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| 10177. |
Average profit of the firm is ₹ 2,00,000. Total assets of the firm are ₹ 15,00,000 whereas Partners Capital is ₹ 12,00,000. If normal rate of return in a similar business is 10% of the capital employed, what is the value of goodwill by Capitalisation of Super Profit? |
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Answer» its a long question beginner you COULD do it easly Explanation:normal VALUE pf businesss = 120000×10% less capital EMPLOYED |
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| 10178. |
The average profit earned by a firm is ₹ 1,00,000 which includes undervaluation of stock of ₹ 40,000 on an average basis. The capital invested in the business is ₹ 6,30,000 and the normal tare of return is 5%. Calculate goodwill of the firm on the basis of 5 time the super profit. |
| Answer» N:AVERAGE Profit earned by a firm = Rs. 1,00,000 Undervaluation of Stock = Rs.40,000 Average Actual Profit = Average Profit earned by a firm + Undervaluation of Stock = 1,00,000 + 40,000 = Rs. 1,40,000 Normal Profit = Capital INVESTMENT x Normal Rate of Return = 6,30,000 x = 31, 500Super Profit = Actual Average Profit - Normal Profit = 1,40,000 - 31, 500 = Rs.1,08, 500 GOODWILL = Super Profit x Number of Times = 1,08,500 x 5 = Rs.5,42,500 | |
| 10179. |
Form the following particulars, calculate value of goodwill of a firm by applying Capitalisation of Average Profit Method: (i) Profits of last five consecutive years ending 31st March are: 2018 – ₹ 54,000; 2017 – ₹ 42,000; 2016 – ₹ 39,000; 2015 – ₹ 67,000 and 2014 – ₹ 59,000. (ii) Capitalisation rate 20%. (iii) Net assets of the firm ₹ 2,00,000. |
| Answer» N:Goodwill = Capitalised VALUE of Profit - Net Assets (CAPITAL Employed) Average Profit = = = 52,200 Capitalised Value of Profit = Profit X Rate of Return = 52,200 x = 2,61,000 Capitalised Value of Profit = 2,61,000 Net Assets (Capital Employed) =2, 00,000 Goodwill = Capitalised Value of Profit - Net Assets (Capital Employed) Goodwill = 2, 61, 000 - 2, 00, 000 = 61, 000 | |
| 10180. |
Capital of the firm of Sharma and Verma is ₹ 2,00,000 and the market rate of interest is 15%. Annual salary to partners is ₹ 12,000 each. The profits for the last three years were ₹ 60,000; ₹ 72,000 and ₹ 84,000. Goodwill is to be valued at 2 years purchase of last 3 years average super profit. Calculate goodwill of the firm. |
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Answer» n:Goodwill = SUPER Profit X Number of YEARS PURCHASE Normal Profit = Capital Investment x = 2,00, 000 x = 30, 000 Year Profit before Partners' SALARY Actual Profit Partners'Salary - = after Salary1 60,000 - 24,000 = 36,000 2 72,000 - 24,000 = 48,000 2 84,000 - 24,000 = 60,000 Average Actual Profit after Salary Partners = = =48,000 Super Profit = Average Actual Profit after Salaries - Normal Profit = 48, 000 - 30,000 =18,000 Number of years purchase = 2 Super Profit =18,000 :. Goodwill = Super Profit x Number of Years Purchase :. Goodwill = 18, 000 x 2 =36, 000 |
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| 10181. |
Ayub and Amit are partners in a firm and they admit Jaspal into partnership w. e. f. 1st April, 2018. They agreed to value goodwill at 3 years purchase of Super Profit Method for which they decided to average profit of last 5 years. The profit for the last 5 years were: The firm has total assets of ₹ 20,00,000 and Outside Liabilities of ₹ 5,00,000 as on that date. Normal Rate of Return in similar business is 10%. Calculate value of goodwill. |
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Answer» e Question:Ayub and Amit are partners in a firm and they admit Jaspal into partnership w. e. f. 1st April, 2018. They agreed to value goodwill at 3 years purchase of Super Profit Method for which they DECIDED to average profit of last 5 years. The profit for the last 5 years were:YEAR Ended Net Profit 31st March, 2014 1,50,000 31st March, 2015 1,80,000 31st March, 2016 1,00,000( Including abnormal loss of L 1,00,000) 31st March, 2017 2,60 000 ' (Including abnormal gain (profit) of 40,000) 31st March, 2018 2,40,000 The firm has total assets of ₹ 20,00,000 and OUTSIDE Liabilities of ₹ 5,00,000 as on that date. Normal Rate of Return in similar business is 10%. Calculate value of goodwill. Solution:1. Calculation Of Normal Profits (31" March) Years 2014 2015 2016 2017 2018Profit /Loss 1,50,000 1,80,000 1,00,000 2,60,000 2,40,000Adjustment --- --- 1,00,000 (40.000) ---Normal Profit 1,51000 1,80,000 2,00,000 2,20,000 2,40,000 Total of Normal Profit = 1,50,000 + 1,80,000 + 2,00,000 + 2,20,000 + 2,40,000 = Rs.9,90,000 2. Calculation of Capital Employed Capital employed = Total Assets - Outside liabilities Capital employed = Rs.20,00,000 - Rs.5,00,000 = Rs.15.00,000 3. Calculation Super Profit Average Profit = = = 1, 98, 000 Normal Profit = Capital Employed x Normal Profit = 15, 00, 000 x = 1, 50, 000 Super Profit = Average Profit - Normal Profit Super Profit = 1,98,000 - 1,50,000 = 48,000 Goodwill = Super Profit x Number of Year Purchase = 48,000 x 3 = Rs.1,44,000 |
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| 10182. |
On 1st January, 2018, A sold goods to B for ₹ 5,000 plus IGST @ 18%. A received ₹ 900 by cheque from B and drew on him a bill for the balance amount payable 3 months after date. The bill was duly accepted by B. A retained the bill till due date. On due date, the bill was paid. Pass Journal entries in the books of A and B. Also, show necessary accounts in the books of both the parties. |
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| 10183. |
On 1st April, 2018, an existing firm had assets of ₹ 75,000 including cash of ₹ 5,000. Its creditors amounted to ₹ 5,000 on that date. The firm had a Reserve of ₹ 10,000 while Partners Capital Accounts showed a balance of ₹ 60,000. If Normal Rate of Return is 20% and goodwill of the firm is valued at ₹ 24,000 at four years purchase of super profit, find average profit per year of the existing firm. |
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Answer» n:Average PROFIT = Normal Profit + Super Profit Capital EMPLOYED = Total Assets - Creditors = 75, 000 - 5, 000 =70, 000 Normal Profit = Capital Employed x = 70, 000 x = 14,000 GOODWILL of the firm =24, 000 Number of years purchase = 4 Super Profit = = 6,000 Average Profit = Normal Profit+ Super Profit Average Profit = 14,000 + 6,000 = 20,000 |
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| 10184. |
A business earned an average profit of ₹ 8,00,000 during the last few years. The normal rate of profit in the similar type of business is 10%. The total value of assets and liabilities of the business were ₹ 22,00,000 and ₹ 5,60,000 respectively. Calculate the value of goodwill of the firm by super profit method if it is valued at 2 years purchase of super profits. |
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Answer» n:Average PROFIT = 8,00,000 Capital Employed = Total ASSETS - outside Liabilities = 22,00,000 - 5, 60, 000 = 16,40, 000 Normal Profit = Capital Employed x = 16, 40, 000 x = 1,64,000 Super Profit = Average Profit - Normal Profit = 8, 00,000 - 1, 64,000 = 6,36,000 Goodwill = Super Profit x No. of Years' Purchase = 6,36,000 x 2.5 = 15, 90, 000 |
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| 10185. |
On 10th March, 2018, A draws on B a bill at 3 months for ₹20,000 which B accepts immediately and returns to A. The bill is honoured due date. Pass necessary Journal entries in the books of both the parties. |
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Answer» On 10TH March, 2018, A draws on B a BILL at 3 months for ₹20,000 which B accepts immediately and returns to A. The bill is HONOURED DUE date.Pass necessary Journal entries in the books of both the parties. |
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| 10186. |
X, Y and Z are sharing profits and losses in the ratio of 5 : 3 : 2. With effect from 1st April, 2018, they decide to share profits and losses in the ratio of 5 : 2 : 3. Calculate each Partner’s gain or sacrifice due to the change in ratio. |
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Answer» n:Old RATIO(X, Y and Z)= 5 : 3 : 2 New Ratio( X, Y and Z)= 5 : 2 : 3 Sacrificing(or Gaining)Ratio= Old Ratio - NewRatio X' s Share = = NILY' s Share = = (SACRIFICE )Z' s Share= (GAIN)Z's Gain = 1 / 10 and Y's Sacrifice = 1 / 10 |
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| 10187. |
Average profit of GS & amp Co. is ₹ 50,000 per year. Average capital employed in the business is ₹ 3,00,000. If the normal rate of return of capital employed is 10%, calculate goodwill of the firm by: (i) Super Profit Method at three years purchase; and (ii) Capitalisation of Super Profit Method. |
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Answer» n:(1) Goodwill = Super Profit x Numbers of Years Purchase Goodwill = 20, 000 x 3 = 60, 000 (2) Goodwill = Super Profit x Goodwill = 20, 000 x = 2 ,00, 000 Working Notes: Calculation Super Profit Average Profit = Average Profit = 50, 000 Normal Profit = Capital Employed x Normal Profit = 3, 00, 000 x -= 30, 000 Super profit = 50,000 - 30,000 =20,000 |
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| 10188. |
A firm earns profit of ₹ 5,00,000. Normal Rate of Return in a similar type of business is 10%. The value of total assets (excluding goodwill) and total outsiders liabilities as on the date of goodwill are ₹ 55,00,000 and ₹ 14,00,000 respectively. Calculate value of goodwill according to Capitalisation of Super Profit Method as well as Capitalisation of Average Profit Method. |
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Answer» n:(i) Calculation of goodwill by capitalisation of super profit method Goodwill = Super Profit x Goodwill = 90,000 x = 9,00 ,000 CAPITAL EMPLOYED = Assets - External Liabilities = 55, 00, 000 - 14, 00, 000 = 41, 00, 000 Normal Profit = Capital Employed x Normal Rate of Return = 41,00, 000 x =4, 10,000 Profit of the firm= 5, 00, 000 Super Profit = Actual profit - Normal Profit = 5100, 000 - 4,10, 000 = 90, 000 (ii) Calculation of Goodwill by capitalisation of average profits method Goodwill = Capitalised Value of Profit - Actual Capital Employed Goodwill = 5,00,000* -41, 00, 000 = 9, 00, 000 Capitalised Value of Profit = Actual Profit x = 5, 00, 000 x = 50, 00, 000 Capital Employed** = Assets - External Liabilities = 55, 00,000 - 14, 00, 000 = 41, 00, 000 |
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| 10189. |
A business has earned average profit of ₹ 1,00,000 during the last few years. Find out the value of goodwill by capitalisation method, given that the assets of the business are ₹ 10,00,000 and its external liabilities are ₹ 1,80,000. The normal rate of return is 10%. |
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Answer» n:Goodwill = Capitalised Value of AVERAGE Profits - ACTUAL CAPITAL Employed Capitalised Value of Average Profit = Average Profit x = 1, 00,000 x = 10,00, 000 Actual Capital Employed = 10, 00, 000 -1, 80,000 = 8,20, 000 Goodwill = 10, 00, 000 - 8,20, 000 = 1,80,000 |
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| 10190. |
The average profit earned by a firm is ₹ 7,50,000 which includes overvaluation of stock of ₹ 30,000 on an average basis. The capital invested in the business is ₹ 4,20,000 and the normal tare of return is 15%. Calculate goodwill of the firm on the basis of 3 time the super profit. |
| Answer» N:Average Profit earned by a firm = Rs. 7,50,000 Undervaluation of Stock = Rs.30,000 Average Actual Profit = Average Profit earned by a firm + Undervaluation of Stock = 7,50,000 + 30,000 = Rs. 7,20,000 Normal Profit = Capital INVESTMENT X = 4,20,000 x = 6,30,000Super Profit = Actual Average Profit - Normal Profit = 7,20,000 - 6,30,000 = Rs.90,000 Goodwill = SUPER Profit x Number of Times = 90,000 x 3 = Rs.2,70,000 | |
| 10191. |
A and B are equal partners. They decide to admit C for 1/3rd share. For the purpose of admission of C, goodwill of the firm is to be valued at four years purchase of super profit. Average capital employed in the firm is ₹ 1,50,000. Normal rate of return may be taken as 15% p.a. Average profit of the firm is ₹ 40,000. Calculate value of goodwill. |
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| 10192. |
Manish sold goods to Kumar for ₹ 10,000 plus CGST and SGST @ 9% each. He received ₹ 1,800 in cash and drew on him a bill for ₹ 10,000 payable 3 months after date. Kumar accepted the bill and returned it to Manish. On due date, Manish presented the bill to Kumar who honoured it. Pass Journal entries in the books of both the parties. |
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| 10193. |
A partnership firm earned net profits during the past three years as follows: Capital investment in the firm throughout the above-mentioned period has been ₹ 4,00,000. Having regard to the risk involved, 15% in considered to be a fair return on the capital. The remuneration of the partners during this period is estimated to be ₹ 1,00,000 p.a. Calculate value of goodwill on the basis of two years purchase of average super profit earned during the above-mentioned three years. |
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Answer» tion:Goodwill = Super Profit x Number of Years' Purchase AVERAGE Actual Profit 17,000 + 20,000 + 23,000 60,000 = Rs 20,000 Fair Rate of Retern NORMAL Profit = Capital EMPLOYED x 100 = 80,000 x- 100 15 Rs12,000 Super Profit = Average Actual Profit-Normal Profit = 20,000 12,000 = Rs8,000 Number of years' purchase = 2 : Goodwill = 8,000x 2 = Rs16,000 |
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| 10194. |
The total capital of the firm of Sakshi, Mehak and Megha is ₹ 1,00,000 and the market rate of interest is 15%. The net profits for the last 3 years were ₹ 30,000; ₹ 36,000 and ₹ 42,000. Goodwill is to be valued at 2 years purchase of the last 3 years super profits. Calculate the goodwill of the firm. |
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Answer» TE YOUR ANSWER IS Iinterest is 15%. The net profits for the last 3 years were ₹ 30,000; ₹ 36,000 and ₹ 42,000. Goodwill is to be VALUED at 2 years purchase of the last 3 years super profits. Calculate the goodwill of the firm.HOPE THIS HELPS ❤️PLEASE MARK AS BRAINLIEST ❤️❤️FOLLOW ME PLEASE |
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| 10195. |
Manbir and Nimrat are partners and they admit Anahat into partnership. It was agreed to value goodwill at three tears purchase on Weighted Average Profit Method taking profits of last five years. Weights assigned to each year as 1, 2, 3, 4 and 5 respectively to profit for the year ended 31st March, 2014 to 2108. The profit for these years were: ₹ 70,000, ₹ 1,40,000, ₹ 1,00,000, ₹ 1,60,000 and ₹ 1,65,000 respectively. Scrutiny of books of account revealed following information: (i) There was an abnormal loss of ₹ 20,000 in the year ended 31st March, 2014. (ii) There was an abnormal gain (profit) of ₹ 30,000 in the year ended 31st March, 2015. (iii) Closing Stock as on 31st March, 2017 was overvalued by ₹ 10,000. Calculate the value of goodwill. |
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Answer» TE YOUR ANSWER ISprofit for the year ended 31st March, 2014 to 2108. The profit for these years were: ₹ 70,000, ₹ 1,40,000, ₹ 1,00,000, ₹ 1,60,000 and ₹ 1,65,000 respectively.Scrutiny of books of ACCOUNT REVEALED following information:(i) There was an abnormal loss of ₹ 20,000 in the year ended 31st March, 2014.(ii) There was an abnormal GAIN (profit) of ₹ 30,000 in the year ended 31st March, 2015.(iii) ClosingHOPE THIS HELPS❤️PLEASE MARK AS BRAINLIEST ❤️❤️ |
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| 10196. |
X and Y are partners in a firm. They admit Z into partnership for equal share. It was agreed that goodwill will be valued at three years purchase of average profit of last five years. Profits for the last five years were: Books of Account of the firm revealed that: (i) The firm had gain (profit) of ₹ 50,000 from sale of machinery sold in the year ended 31st March, 2015. The gain (profit) was credited in Profit and Loss Account. (ii) There was an abnormal loss of ₹ 20,000 incurred in the year ended 31st March, 2016 because of a machine becoming obsolete in accident. (iii) Overhauling cost of second hand machinery purchased on 1st July, 2016 amounting to ₹ 1,00,000 was debited to Repairs Account. Depreciation is charged @ 20% p.a. on Written Down Value Method. Calculate the value of goodwill. |
| Answer» TE YOUR ANSWER ISLoss Account.(II) There was an abnormal loss of ₹ 20,000 incurred in the YEAR ENDED 31st March, 2016 because of a machine becoming obsolete in accident.(iii) Overhauling cost of second hand machinery purchased on 1st July,HOPE YHIS HELPS ❤️PLEASE MARK AS BRAINLIEST ❤️❤️ | |
| 10197. |
A partnership firm earned net profits during the last three years ended 31st March, as follows: 2016 – ₹ 17,000; 2017 – ₹ 20,000; 2018 – ₹ 23,000. The capital investment in the firm throughout the above-mentioned period has been ₹ 80,000. Having regard to the risk involved, 15% is considered to be a fair return on the capital. Calculate value of goodwill on the basis of two years purchase of average super profit earned during the above-mentioned three years. |
| Answer» ANOTHER SAID 3there a DA SILVA is | |
| 10198. |
X and Y are partners sharing profits and losses in the ratio of 3 : 2. They admit Z into partnership for 1/4th share in goodwill. Z brings in his share of goodwill in cash. Goodwill for this purpose is to be calculated at two years purchase of the average normal profit of past three years. Profits of the last three years ended 31st March, were: 2016 – Profit ₹ 50,000 (including profit on sale of assets ₹5,000). 2017 – Loss ₹ 20,000 (includes loss by fire ₹ 30,000). 2018 – Profit ₹ 70,000 (including insurance claim received ₹ 18,000 and interest on investments and Dividend received ₹ 8,000). Calculate value of goodwill. Also, calculate goodwill brought in by Z. |
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| 10199. |
Gupta and Bose had a firm in which they had invested ₹ 50,000. On an average, the profits were ₹ 16,000. The normal rate of return in the industry is 15%. Goodwill is to be valued at four years purchase of profits in excess of profits @ 15% on the money invested. Value th goodwill. |
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Answer» tion:Working Notes:Goodwill = Nornal profit = ACTUAL Profit = SUPER Profit = Actual Profit - Normal Profit =16,000-7,500=8,500 NUMBER of years PURCHASE =4Super Profit =8,500Goodwill = Goodwill = = 34,000 |
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| 10200. |
Calculate value of goodwill on the basis of three years purchase of average profit of the preceding five years which were as follows: |
| Answer» PLZ UPLOAD the FULL QUE | |