CBSE Questions for Class 12 Commerce Accountancy Reconstitution Of A Partnership Firm - Admission Of A Partner Quiz 12 - MCQExams.com

A & B are partners with capitals of Rs.$$10,000$$ and Rs.$$20,000$$ respectively and sharing profits eqally. They admitted C as their third partner with $$1/4$$th profits on the payment of Rs.$$12,000$$. The amount of hidden goodwill is _______.
  • Rs.$$6,000$$
  • Rs.$$10,000$$
  • Rs.$$8,000$$
  • None of the above
Find the goodwill of the firm using capitalization method from the following information:
Total Capital Employed Rs.$$8,00,000$$
Reasonable Rate of Return $$15\%$$
Profits for the year Rs$$12,00,000$$
  • Rs.$$82,00,000$$
  • Rs.$$12,00,000$$
  • Rs.$$72,00,000$$
  • Rs.$$42,00,000$$
Which of the following formula is/are used for valuation goodwill under super profit basis?
  • Goodwill $$=$$ Super profit * No. of years purchases.
  • Goodwill $$=$$ Super profit * annuity factor.
  • Goodwill $$=$$ $$\dfrac{Super profit}{Capitalisation rate} X 100$$.
  • All of the above.
A, B & C are equal partners. C wanted to retire for which value of goodwill is considered as $$Rs.90,000$$.
The necessary journal entry will be:   
  • A Capital A/c Dr. 15,000

    B Capital A/c Dr. 15,000

    To C A/c 30,000
  • C Capital A/c Dr. 30,000

    To A Capital A/c 15,000

    To B Capital A/c 15,000
  • C Capital A/c Dr. 30,000

    To A Capital A/c 10,000

    To B Capital A/c 20,000
  • Premium for Goodwill A/c Dr. 30,000

    To A Capital A/c 10,000

    To B Capital A/c 20,000
Balances of A, B & C sharing profits & losses in proportionate to their capitals, stood as:
A = $$Rs.2,00,000$$
B = $$Rs.3,00,000$$
C = $$Rs.2,00,000$$
A desired to retire from the firm, B and C share the future profits equally, Goodwill of the entire firm be valued at $$Rs.1,40,000$$ and no Goodwill account being raised. What entry will be passed for payment of Goodwill?
  • Credit Partner's Capital A/c with old profit sharing ratio for $$Rs.1,40,000$$.
  • Credit Partner's Capital A/c with new profit sharing ratio for $$Rs.1,40,000$$.
  • Credit A's Capital A/c with $$Rs.40,000$$ and debit B's Capital A/c with $$Rs.10,000$$ & C's Capital A/c with $$Rs.30,000$$.
  • Credit Partner's Capital A/c with gaining ratio for $$Rs.1,40,000$$.
A,B, & C are equal partners. D is admitted to the firm for $$1/4$$th share. D brings Rs.$$20,000$$ capital and Rs.$$5,000$$ being half of the premium for goodwill.
The value of goodwill of the firm is
  • Rs.$$10,000$$
  • Rs.$$40,000$$
  • Rs.$$20,000$$
  • None of the above
The profits for $$2012-2013$$ is Rs.$$2,000$$; for $$2013-2014$$ is Rs.$$26,100$$ and for $$2014-2015$$ is Rs.$$31,200$$. Closing stock for $$2013-2014$$ and $$2014-2015$$ includes the defective items of Rs.$$2,200$$ and Rs.$$6,200$$ respectively which were considered as having market value nil. Calculate goodwill on average profit method.
  • Rs.$$23,700$$
  • Rs.$$17,700$$
  • Rs.$$13,700$$
  • Rs.$$17,300$$
On $$1$$st April, $$2014$$ on the admission of a new partner, it is agreed that goodwill of the firm is valued at $$2$$years purchase of weighted average profits for the $$3$$ years. The profits for last $$3$$ years have been as follows:
Year endedProfitsWeight
$$31$$st March $$2011$$$$45,000$$$$1$$
$$31$$st March $$2012$$$$52,500$$$$2$$
$$31$$st March $$2013$$
$$72,000$$$$3$$

Value of goodwill will be
  • Rs.$$1,22,000$$
  • Rs.$$2,22,000$$
  • Rs.$$1,22,222$$
  • Rs.$$1,20,000$$
A, B & C are partners sharing profits and loss in the ratio $$3:2:1$$. They decide to change their profit sharing ratio to $$2:2:1$$. To gave effect to this new profit sharing ratio, they decide to value the goodwill at Rs. $$30,000$$. Pass the necessary journal entry if Goodwill not appearing in the old balance sheet and should not appear in the new balance sheet.
B's Capital A/c             Dr.
C's Capital A/c            Dr.
To A's Capital A/c		$$2,000$$
$$1,000$$		$$3,000$$
Goodwill A/c              Dr.
To A's Capital A/c
To B's Capital A/c
To C's Capital A/c		$$30,000$$
$$12,000$$
$$12,000$$
$$6,000$$
A's Capital A/c             Dr.
B's Capital A/c             Dr.
C's Capital A/c             Dr.
To Goodwill A/c		$$12,000$$
$$12,000$$
$$6,000$$		$$30,000$$
A's Capital A/c              Dr.
To B's Capital A/c
To C's Capital A/c		$$3,000$$$$2,000$$
$$1,000$$
  • A
  • B
  • C
  • D
The profits and losses for the last years are:
YearProfit/(loss)
$$2001-2002$$$$(20,000)$$
$$2002-2003$$$$(5,000)$$
$$2003-2004$$$$1,96,000$$
$$2004-2005$$$$1,52,000$$
The average capital employed in the business is Rs. $$4,00,000$$. The rate of interest expected from capital invested is $$12\%$$. The remuneration of partners is estimated to be Rs. $$2,000$$p.m. not charged in the above losses/profits. Calculate the value of goodwill on the basis of $$2$$ years purchase of super profits based on the average of four years.
  • Rs. $$18,000$$
  • Rs. $$17,500$$
  • Rs. $$17,000$$
  • Rs. $$16,500$$
Find the goodwill from the following information:
Capital employedRs. $$8,25,000$$
Rate of normal returnRs. $$10\%$$
Future Maintainable profitRs. $$1,50,000$$
Annuity factorRs. $$3.17$$
  • Rs. $$4,75,500$$
  • Rs. $$2,61,525$$
  • Rs. $$3,13,975$$
  • Rs. $$2,13,975$$
Profits & losses for the last years are:
$$2011-2012$$ Losses Rs. $$10,000$$
$$2012-2013$$ Losses Rs. $$2,500$$
$$2013-2014$$ Profits Rs. $$98,000$$
$$2014-2015$$ Profits Rs. $$76,000$$
The average capital employed in the business is Rs. $$2,00,000$$. The rate of interest expected from capital invested is $$12\%$$. The remuneration of partners is estimated to be Rs. $$1,000$$ per month. Calculate the value of goodwill on the basis of four years purchase of super profits based on the annuity of the four years. Take discounting rate as $$10\%$$.
  • Rs. $$13,500$$
  • Rs. $$13,568$$
  • Rs. $$13,668$$
  • Rs. $$13,868$$
The net profits of a business, after providing for income tax for the last $$5$$ years were: Rs. $$80,000$$, Rs. $$1,00,000$$, Rs. $$1,20,000$$, Rs. $$1,25,000$$ and Rs. $$2,00,000$$ respectively. The capital employed in the business is Rs. $$10,00,000$$ and the normal rate of return is $$10\%$$. Calculate the value of the goodwill on the basis of the annuity method taking the present value of annuity of Rs. $$1$$ for $$5$$ years at $$10\%$$ is $$3.7907$$.
  • Rs. $$84,768$$
  • Rs. $$95,768$$
  • Rs. $$94,768$$
  • Rs. $$60,000$$
The net profits after tax of NZ & Co. for the past $$3$$ years are as follows.
YearProfit
$$2010-2011$$$$20,000$$
$$2011-2012$$$$2,61,000$$
$$2012-2013$$$$3,12,000$$
Closing stock for $$2011-2012$$ and $$2012-2013$$ includes the defective items of Rs. $$22,000$$ and Rs. $$62,000$$ respectively which were considered as having no market value. Calculate average profit for goodwill.
  • Rs. $$2,37,000$$
  • Rs. $$1,77,000$$
  • Rs. $$1,37,000$$
  • Rs. $$1,73,000$$
The net profits after tax of Z & Co. for the past $$5$$ years are as follows.
YearProfit
$$2007-2008$$$$2,56,000$$
$$2008-2009$$$$2,64,000$$
$$2009-2010$$$$3,76,000$$
$$2010-2011$$$$4,86,000$$
$$2011-2012$$$$5,30,500$$
The capital employed is Rs. $$16,00,000$$. Rate if normal return is $$15\%$$. Calculate the value of the goodwill on the basis of annuity method on super-profits basis, taking the present value of an annuity of Rs. $$1$$ for the $$4$$ years at $$15\%$$ as $$2.855$$.
  • Rs. $$7,65,000$$
  • Rs. $$8,67,800$$
  • Rs. $$5,70,000$$
  • Rs. $$4,06,838$$
The profits and losses for the last years are:
$$2011-2012$$ Losses Rs. $$10,000$$
$$2012-2013$$ Losses Rs. $$2,500$$
$$2013-2014$$ Profits Rs. $$98,000$$
$$2014-2015$$ Profits Rs. $$76,000$$
The average capital employed in the business is Rs. $$2,00,000$$. The rate of return expected from capital invested is $$12\%$$. The remuneration of partners is estimated to be Rs. $$1,000$$ per month not charged in the above losses/profits. Calculate the value of goodwill on the basis of two years purchase of super profits based on the average profit of $$4$$ years.
  • Rs. $$9,000$$
  • Rs. $$8,750$$
  • Rs. $$8,500$$
  • Rs. $$8,250$$
P & Q are partners sharing Profits in the ratio of $$2:1$$. R is admitted to the partnership with effect from $$1$$st April on the term that he will bring Rs. $$20,000$$ as his capital for $$1/4$$th share and pays Rs. $$9,000$$ for goodwill, half of which is to be withdrawn by P & Q. How much cash can P & Q withdraw from the firm?
  • $$3,000 : 1,500$$
  • $$6,000 : 3,000$$
  • NIL
  • None of the above
H & M are partners in a firm sharing profits and losses in the ratio of $$3:2$$. Their capitals are $$Rs.90,000$$ and $$Rs.60,000$$ respectively. They admit K as a new partner who will get $$1/6$$th share in the profits of the firm. K brings in $$Rs.37,500$$ as his capital. Calculate hidden goodwill.
  • $$Rs.37,500$$
  • $$Rs.75,000$$
  • $$Rs.56,250$$
  • $$Rs.60,000$$
A & B are partners with capitals of $$Rs.14,000$$ and $$Rs.28,000$$ respectively and sharing profits equally. They admitted C as their third partner with $$1/4$$ profits of the firm on the payment of $$Rs.16,800$$. The amount of hidden goodwill is _________.
  • $$Rs.8,400$$
  • $$Rs.14,000$$
  • $$Rs.11,200$$
  • None of the above
A & B shares profit & losses equally. They admit C as an equal partner and assets were revalued as follow: Goodwill at Rs. $$30,000$$(book value NIL). Stock at Rs. $$20,000$$(book value Rs. $$12,000$$); Machinery at Rs. $$60,000$$(book value Rs. $$55,000$$). C is to bring in Rs. $$20,000$$ as his capital and the necessary cash towards his share of Goodwill. Goodwill Account will not be shown in the books. Find the profit/loss on revaluation to be shared among A, B & C.
  • $$21,500 : 21,500 : 0$$
  • $$6,500 : 6,500 : 0$$
  • $$14,333 : 14,333 : 14,333$$
  • $$4,333 : 4,333 : 4,333$$
A & B shares profit & losses equally. They admit C as an equal partner and goodwill was valued at Rs.$$30,000$$ (book value NIL). C is to bring in Rs.$$20,000$$ as his capital and the necessary cash towards his share of goodwill. Goodwill Account will not remain in the books. What will be the final effect of goodwill in the partners' capital account?
  • A & B's account credited with Rs.$$5,000$$ each.
  • All partner's account credited with Rs.$$10,000$$ each
  • Only C's account credited with Rs.$$10,000$$ as cash bought in for goodwill
  • Final effect will be nil in each partner
Capital accounts of partner A & B are Rs.$$30,000$$ & Rs.$$16,000$$. They admitted C on the following conditions.
 -That C brings in Rs.$$10,000$$ as his capital for $$1/4$$th share in profits.
 -That a goodwill account be raised in the books of the firm at Rs.$$15,000$$
 -Profit on revaluation of assets & liabilities was Rs.$$2,100$$.
 -That the capital accounts of the partners be readjusted on the basis of their profit sharing ratio and any additional amount be debited or credited to their current accounts.
 -General reserve appearing in balance sheet at the time of admission of C was Rs.$$6,000$$.
To give effect to above, current account of A & B  will be ________________.
  • Debited by Rs.$$25,400$$ & Rs.$$13,700$$
  • Credited by Rs.$$20,500$$ & Rs.$$10,300$$
  • Credited by Rs.$$26,550$$ & Rs.$$12,550$$
  • Debited by Rs.$$20,500$$ & Rs.$$10,300$$
A & B are sharing profits and losses in the ratio of $$3:2$$. C joins the firm for $$1/3$$rd share and is to pay Rs.$$20,000$$ as permium for goodwill but cannot pay anything. As between A & B, they decided to share profits and losses equally. Required journal entry

A Capital A/c      Dr.
B Capital A/c      Dr.
     To Coodwill A/c		$$36,000$$
$$24,000$$



$$60,000$$
Goodwill A/c      Dr.
   To A Capitla A/c
   To B Capital A/c 		$$60,000$$




$$36,000$$
$$24,000$$

Goodwill A/c         Dr,
   To A Capital A/c
To B Capital A/c		$$60,000$$




$$30,000$$
$$30,000$$
Premium for Goodwill A/c        Dr.
    To A Capital A/c
    To B Capital A/c		$$60,000$$



$$24,000$$
$$36,000$$
  • A
  • B
  • C
  • D
X & Y share profits & losses as $$1:2$$. They agree to admit Z (who is also in business on his own) as a third partner.
At the time of admission of Z goodwill was appearing in balance sheet at Rs.$$14,000$$ which was revalued at Rs.$$18,000$$. Z brings the following assets into the partnership:
Goodwill- Rs.$$6,000$$ Furniture-Rs.$$2,800$$, Stock-Rs.$$13,600$$
After admission of Z, goodwill will appear at _______ in the balance sheet.
  • Rs.$$14,000$$
  • Rs.$$18,000$$
  • Rs.$$24,000$$
  • Rs.$$26,000$$
A,B & C were equal partners with goodwill $$Rs.1,20,000$$ in the balance sheet and they agreed to take D as an equal partner on the term that he should bring $$Rs.1,60,000$$ as his capital and goodwill, his share of goodwill was evaluated at $$Rs.60,000$$ and the goodwill account is to be written off before admission. What will be the treatment for goodwill?
  • Write off the goodwill of $$Rs.1,20,000$$ in old ratio.
  • Cash brought in by D for goodwill will be distributed among old partners in sacrificing ratio.
  • Both (A) & (B).
  • None of the above.
A & B are partners sharing profits and losses in the ratio of $$3:2$$. C joins the firm for $$1/3$$rd share, and is to pay Rs.$$40,000$$ as premium for goodwill but cannot pay anything. As netween A and B, they decided to share profits and losses equally. Goodwill already appearing in balance sheet is $$1,00,000$$ Required journal entry

A Capital A/c      Dr.
B Capital A/c      Dr.
   To Goodwill A/c		$$72,000$$
$$48,000$$



$$1,20,000$$
Goodwill A/c      Dr.
   To A Capital A/c
   To B Capital A/c		$$1,20,000$$



$$72,000$$
$$48,000$$
Goodwill A/c      Dr.
   To A Capital A/c
   To B Capital A/c		$$20,000$$



$$12,000$$
$$8,000$$
Premium for Goodwill A/c      Dr.
   To A Capital A/c
   To B Capital A/c		$$20,000$$



$$8,000$$
$$12,000$$
  • A
  • B
  • C
  • D
A & B are sharing profits & losses in the ratio of $$3:2$$. C is coming as a new partner who pays Rs.$$25,000$$ as premium fro goodwill. The profit sharing ration among A,B & C is equal. If premium money is retained in business which of the following journal entry is correct for sharing permium for goodwill?
A Capital A/c                     Dr.
B Capital A/c                     Dr.
   To Premium for Goodwill A/c		$$20,000$$
$$5,000$$



$$25,000$$
Premium for Goodwill A/c         Dr.
   To A Capital A/c
   To B Capital A/c		$$25,000$$



$$5,000$$
$$20,000$$
Premium for Goodwill A/c     Dr.
   To A Capital A/c
   To B Capital A/c		$$25,000$$



$$20,000$$
$$5,000$$
Premium for Goodwill A/c     Dr.
   To A Capital A/c
   To B Capital A/c		$$25,000$$



$$15,000$$
$$10,000$$
  • A
  • B
  • C
  • D
A & B are sharing profits in the ratio of $$5:3$$. C was admitted on the following terms:
New profit sharing ratio wiill be $$7:5:3$$
Machinery would be appreciated by $$10\%$$ (book value Rs.$$1,80,000$$)
Building would be depreciated by $$6\%$$ (book value Rs.$$1,50,000$$)
To create provision for bad debts $$5\%$$ on Debtors of Rs.$$40,000$$
Find the distribution of profit/loss on revaluation between A & B
  • Profit $$4,083$$ & $$2,917$$
  • Profit $$2,625$$ & $$4,375$$
  • Profit $$2,917$$ & $$4,083$$
  • Profit $$4,375$$ & $$2,625$$
A,B & C are equal partners. They decided to take D who brought in Rs.$$36,000$$ as goodwill. The new profit sharing ratio is $$3:3:2:2$$. The journal entry for goodwill will be-

A Capital A/c      Dr.
B Capital A/c      Dr.
C Capital A/c      Dr.
   To D Capital A/c		$$6,000$$
$$6,000$$
$$24,000$$




$$36,000$$
Cash A/c      Dr.
   To A Capital A/c
   To B Capital A/c
   To C Capital A/c		$$36,000$$




$$6,000$$
$$6,000$$
$$24,000$$
Cash A/c      Dr.
   To A Capital A/c
   To B Capital A/c
   To C Capital A/c		$$36,000$$




$$24,000$$
$$6,000$$
$$6,000$$
Goodwill A/c     Dr.
   To A Capital A/c
   To B Capital A/c
   To C Capital A/c		$$36,000$$




$$12,000$$
$$12,000$$
$$12,000$$
  • A
  • B
  • C
  • D
N & Z are partners in a firm sharing profits and losss in the ratio of $$3:2$$. S joins the firm for $$1/3$$rd share. and is to pay Rs.$$5,000$$ as premium for goodwill but cannot pay anything. As between N and Z, they decided to share profits and losses equally. It was agreed that goodwill has to be adjusted through partner's capital account.
Required journal entry-

N Capital A/c      Dr.
Z Capital A/c      Dr.
   To S A/c		$$4,000$$
$$1,000$$



$$5,000$$
S Capital A/c      Dr.
   To N Capital A/c
   To Z Capital A/c		$$5,000$$



$$4,000$$
$$1,000$$
S Capital A/c      Dr.
   To N Capital A/c
   To Z Capital A/c		$$5,000$$



$$1,000$$
$$4,000$$
Premium for Goodwill A/c      Dr.
   To N Capital A/c
To Z Capital A/c		$$20,000$$



$$8,000$$
$$12,000$$
  • A
  • B
  • C
  • D
Find the goodwill from the following information:
Capital employed - Rs 8,25,000
Rate of normal return - Rs. $$10\%$$
Future Maintainable profit - Rs 1,50,000
Annuity factor - Rs. 3.17
  • Rs 4,75,500
  • Rs 2,61,525
  • Rs 3,13,975
  • Rs 2,13,975
The profits of last $$5$$ years are $$Rs.60,000$$; $$Rs.67,500$$; $$Rs.52,500$$; $$Rs.75,000$$ & $$Rs.60,000$$. Find the value of goodwill, if it is calculated on average profits of last $$5$$ years on the basis of $$3$$ years of purchase.
  • $$Rs.63,750$$
  • $$Rs.1,91,250$$
  • $$Rs.1,89,000$$
  • $$Rs.2,13,750$$
The profits of last five years are $$Rs.85,000$$, $$Rs.90,000$$; $$Rs.70,000$$; $$Rs.1,00,000$$ and $$Rs.80,000$$. Find the value of goodwill, if it is calculated on average profits of last five years on the basis of $$3$$ years of purchase.
  • $$Rs.85,000$$
  • $$Rs.2,55,000$$
  • $$Rs.2,75,000$$
  • $$Rs,2,85,000$$
The profits for 2012-2013 is Rs. 2,000; for 2013-2014 is Rs. 26,100 and for 2014-2015 is Rs. 31,Closing stock for 2013-2014 and 2014-2015 include the defective items of Rs. 2,200 and Rs. 6,200 respectively which were considered as having market value nil. Calculate goodwill on average profit method.
  • Rs. 23,700
  • Rs. 17,700
  • Rs. 13,700
  • Rs. 17,300
On $$1$$st April, $$2014$$ on the admission of a new partner, it is agreed that goodwill of the firm is valued at $$2$$ years purchase of weighted average profits for the last three years. The profits for last $$3$$ years have been as follows:
Year endedProfitsWeight
31st March 201145,0001
31st March 201252,5002
31st March 201372,0003
Value of goodwill will be ___________.
  • $$Rs.1,22,000$$
  • $$Rs.2,22,000$$
  • $$Rs.1,22,222$$
  • $$Rs.1,20,000$$
On 1st April, 2011 on the admission of a new partner, it is agreed that goodwill of the firm is valued at 3 years purchase of average profits for the last five years. The profits for last 5 years have been as follows:
Year endedProfit / (loss)
31st March 201116,110
31st March 201211,850
31st March 20138,145
31st March 2014(600)
31st March 201512,750
Value of goodwill will be _____________.
  • $$Rs.28,953$$
  • $$Rs.29,673$$
  • $$Rs.28,673$$
  • $$Rs.29,953$$
A & B were partners sharing profits & losses in the ratio of $$3:1$$. C was admitted to the firm on the following terms:
C would provide Rs.$$1,00,000$$ as a capital and pay Rs.$$20,000$$ as goodwill for his $$1/3$$rd share in future profits. Goodwill account would not appear in the books. A,B & C would share profits equally. Which of the following journal is correct in relation to premium for goodwill Rs.$$20,000$$ brought in by new partner?

Premium for Goodwill A/c      Dr.
B Capital A/c                         Dr.
   To A Capital A/c		$$20,000$$
$$5,000$$



$$25,000$$
Premium for Goodwill A/c      Dr.
   To A Capital A/c
   To B Capital A/c		$$20,000$$



$$15,000$$
$$5,000$$
Premium for Goodwill A/c      Dr.
   To A Capital A/c
   To B Capital A/c		$$20,000$$



$$10,000$$
$$10,000$$
Premium for Goodwill A/c      Dr.
A Capital A/c           Dr.
   To B Capital A/c		$$20,000$$
$$5,000$$



$$25,000$$
  • A
  • B
  • C
  • D
A & B are partners with capitals of $$Rs.10,000$$ and $$Rs.20,000$$ respectively and sharing profits equally. They admitted C as their third partner with 1/4th profits on the payment of $$Rs.12,000$$. The amount of hidden goodwill is ___________.
  • $$Rs.6,000$$
  • $$Rs.10,000$$
  • $$Rs.8,000$$
  • None of the above
The profits and losses for the last four years are:
2011-2012 Losses Rs 10,000
2012-2013 Losses Rs 2,500
2013-2014 Profits Rs 98,000
2014-2015 Profits Rs 76,000

The average capital employed in the business is Rs 2,00,The rate of interest expected for capital invested is $$12\%$$. The remuneration of partners is estimated to be Rs 1,000 per month not charged in the above losses/profits. Calculate the value of goodwill on the basis of two years purchase of super profits based on the average of 4 years.
  • Rs 9,000
  • Rs 8,750
  • Rs 8,500
  • Rs 8,250
The net profits of a business, after providing for income tax for the last 5 years were: Rs 80,000, Rs 1,00,000, Rs 1,20,000, Rs 1,25,000 and Rs 2,00,000 respectively. The capital employed in the business is Rs 10,00,000 and the normal rate of return is $$10\%$$. Calculate the value of the goodwill on the basis of the annuity method taking the present value of annuity of Rs 1 for 5 years at $$10\%$$ is 3.7907.
  • Rs 84,768
  • Rs 95,768
  • Rs 94,768
  • Rs 60,000
A & B shares profit and losses equally. They admit C as equal partner and goodwill was valued as Rs 60,000 (book value NIL). C is to bring in Rs 40,000 as his capital and the necessary cash towards his share of Goodwill. Goodwill account will not remain in the books. What will be the final effect of goodwill in the partner's capital account?
  • A & B's account credited with Rs 10,000 each.
  • All partners account credited with Rs 20,000 each.
  • Only C's account credited with Rs 20,000 as cash bought in for goodwill.
  • Final effect will be nil in each partner. 
A & B are partners sharing the profit in the ratio of 3:Thay take C as a new partner,  who is supposed to bring Rs 25,000 against capital and Rs 10,000 against goodwill. New profit sharing ratio is 1:1:C is able to bring Rs 30,000 only. How this will be treated in the book of the firm? 
  • A & B will share goodwill brought by C as Rs 4,000: Rs 1,000
  • Goodwill not brought, will be adjusted to the extent of Rs 15,000 in old profit sharing ratio.
  • Both (A) & (B)
  • None of above
Capital employed by a partnership firm is $$Rs.1,00,000$$. Its average profit is $$Rs.20,000$$. Normal rate of return is $$15\%$$. Value of goodwill is _________.
  • $$Rs.33,333$$
  • $$Rs.30,000$$
  • $$Rs.23,333$$
  • $$Rs.43,667$$
The profits and losses for the last years are:
YearProfit/(loss)
2001-2002(20,000)
2002-2003(5000)
2003-20041,96,000
2004-20051,52,000
The average capital employed in the business is Rs 4,00,The rate of interest expected from capital invested is $$12\%$$. The remuneration of partners is estimated to be Rs 2,000 p.m. not charged in the above losses/profits. Calculate the value of goodwill on the basis of 2 years purchase of super profits based on the average of four years.
  • Rs 18,000
  • Rs 17,500
  • Rs 17,000
  • Rs 16,500
The net profits after tax of NZ & Co. for the past 3 years are as follows:
YearProfit
2010-201120,000
2011-20122,61,000
2012-20133,12,000
Closing stock for 2011-2012 and 2012-2013 includes the defective items of Rs 22,000 and Rs 62,000 respectively which were considered as having no market value. Calculate goodwill on average profit method.
  • Rs 2,37,000
  • Rs 1,77,000
  • Rs 1,37,000
  • Rs 1,73,000
The net profits after tax of Z & Co. for the past 5 years are as follows:
YearProfit
2007-20082,56,000
2008-20092,64,000
2009-20103,76,000
2010-20114,86,000
2011-20125,30,500
The capital employed is Rs. 16,00,Rate of normal return is $$15\%$$. Calculate the value of the goodwill on the basis of annuity method on super-profits basis, taking the present value of an annuity of Rs 1 for the 4 years at $$15\%$$ as 2.855
  • Rs. 7,65,000
  • Rs 8,67,800
  • Rs 5,70,000
  • Rs 4,06,838
A & B are partners sharing profits & losses in the ratio of 3:C was admitted to the firm and to introduce a capital of Rs  25,The new profit sharing ratio of A, B and C will be 3:2:1 respectively. C is unable to bring in cash for his share of goodwill, partners therefore, decide to raise goodwill account in the books of the firm. They further decide to calculate goodwill on the basis of C's share in the profits and the capital contribution made by him to the firm. Before admission of C capital account balance of A & B was Rs 44,000 & Rs 36,000 respectively. Total goodwill to be raised in the books of the firm = ?
  • Rs 1,50,000
  • Rs 1,00,000
  • Rs 50,000
  • Rs 45,000
Capital accounts of partner A & B are Rs 30,000 & Rs 16,000, They admitted C on the following conditions.
  - That C brings in Rs 10,000 as his capital for 1/4th share in profits.
  - That a goodwill account be raised in the books of the firm at Rs 15,000.
  - Profit on revaluation of assets & liabilities was Rs. 2,100
  - That the capital accounts of the partners be readjusted on the basis of their profit sharing ratio and any additional amount be debited or credited to their current accounts.
  - General reserve appearing in balance sheet at the time of admission of C was Rs 6,000.
To give effect to above current account of A & B will be ......... 
  • Debited by Rs 25,400 & Rs 13,700
  • Credited by Rs 20,500 & Rs 10,300
  • Credited by Rs 26,550 & Rs 12,550
  • Debited by Rs 20,500 & Rs 10,300
Balance of R,H & M sharing profits & losses in the ratio 2:3:2 stood as R - 10,000; H - 15,00,000; M - 10,00,000; Joint Life Policy 3,50,000 H desired to retire from the firm and the remaining partners decided to carry on with  the future profit sharing ratio of 3:2 Joint policy of the partners surrendered and cash obtained 3,50,000 What would be the treatment for JLP A/c?
  • 3,50,000 credited to partner's capital account in new ratio.
  • 3,50,000 credited to partner's capital account in old ratio.
  • 3,50,000 credited to partner's capital account in capital ratio.
  • 3,50,000 credited to JLP account
A, B and C are the partners sharing profits in the ratio 7 : 5 :C died on 30th June. It was decided to value the goodwill on the basis of three year's purchased of last five year average profits. If the Profits are Rs. 53,600; Rs. 57,400; Rs.57,800; Rs. 48,000 and Rs. 26,What will be C's share of goodwill?
  • Rs. 9135
  • Rs. 55,200
  • Rs. 1,65,600
  • Rs. 54,000
0:0:1


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