Question :
On 1st April, 2014, a firm had assets of Rs. 1,00,000 excluding stock of Rs. 20,000. Partners’ Capital Accounts showed a balance of Rs. 60,000. The current liabilities were Rs. 10,000 and the balance constituted the reserve. If the normal rate of return is 8%, the ‘Goodwill’ of the firm is valued at Rs.60,000 at four years purchases of super profit, the average profit of the firm will be
Option 1: Rs 23,800
Option 2: Rs 50,000
Option 3: Rs 43,000
Option 4: None of the above
Correct Answer: Rs 23,800
Solution :
Answer = Rs 23,800
60,000/4 = super profit
Super profit = 15,000
Capital employed = total assets – outsider liabilities
1,20,000 - 10,000 = 1,10,000
Normal profit = 1,10,000 X 8/100 = 8,800
Super profit = average profit – normal profit
15,000= average profit - 8,800
Average profit = 23,800 Hence, the correct option is 1.
Question : A firm earned Rs. 60,000 as profit, the normal rate of return being 10%. Assets of the firm are Rs. 7,20,000 (excluding goodwill) and Liabilities are Rs. 2,40,000. The value of goodwill by Capitalisation of Average Profit Method is
Option 1: Rs 1,20,000
Option 2: RS 60,000
Option 3: Rs 4,80,000
Option 4: Rs 2,40,000
A, B and C were partners in a firm sharing profits in the ratio of 6:5:4.Their capitals were A—Rs. 1,00,000; B—Rs. 80,000 and C—Rs. 60,000 respectively. On 1st April, 2009, A retired from the firm and the new profit-sharing ratio between B and C was decided as 1:4.0n A's retirement, the goodwill of the firm was valued at Rs. 1,80,000. Balance of General reserve Rs. 60,000 and profit and loss debit balance Rs. 30,000. Amount payable to A will be
Option 1: Rs 1,84,000
Option 2: Rs 1,96,000
Option 3: Rs 1,00,000
Question : M/s Hi-Tech India has assets of Rs. 5,00,000 whereas liabilities are: Partner; Capitals—Rs. 3,50,000, General Reserve—Rs. 60,000 and Sundry Creditors—Rs. 90,000. If the normal rate of return is 10% and the goodwill of the firm is valued at Rs. 90,000 at 2 years; purchase of super profit, the average profit of the firm will be
Option 1: Rs.4,000
Option 2: Rs.41,000
Option 3: Rs.86,000
Option 4: None of these
R, B and L were partners in a firm sharing profits and losses in the ratio equally. With effect from 1st April, 2018 they decided to share future profits and losses in the ratio of 3:2:1. On that date their Balance Sheet showed a debit balance of Rs. 24,000 in Profit and Loss Account and a balance of Rs. 1,44,000 in General Reserve.
It was also agreed that:
(a) The goodwill of the firm be valued at Rs. 1,80,000.
(b) The Land (having book value of Rs. 3,00,000) will be valued at Rs. 4,80,000
Profit/Loss on revaluation are:
Option 1: Rs 1,40,000 profit
Option 2: Rs 1,80,000 profit
Option 3: Rs 1,80,000 loss
Question : The goodwill of a firm is Rs.54,000 valued at 4 years purchase of super profit. The capital employed of firm is Rs.2.00,000 and normal rate of return is 10%. The average profit of firm is:
Option 1: Rs.23,500
Option 2: Rs.33,500
Option 3: Rs.20,000
Option 4: Rs.24,500
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