Question 08 Chapter 3 of +2 Part-1 – USHA Publication 12 Class Part – 1

Q 8 CH 3 Usha 2 Book 2018 Solution min 1024x576 - Question 08 Chapter 3 of +2 Part-1 - USHA Publication  12 Class Part - 1

Question 08 Chapter 3 of +2-Part-1

8. (Weighted Average Profit Method) The profits of Ram Mills for the last five years were as under:

Year  Profit/Loss
2015 10,000
2016 20,000
2017 30,000
2018 40,000
2019 60,000

Calculate the value of goodwill is 2 years purchase of average weighted profits. The weights are 1,2,3,4 and 5 in the year of 2015, 2016, 2017, 2018 and 2019.

 

The solution of Question 08 Chapter 3 of +2 Part-1: – 

 

Calculation of Weighted Average Profit
Year
Adjusted Profit
(A)
Weight
(D)
Product
(E = C * D)

31st March, 2016 10,00 1 20,000
31st March, 2017 20,000 2 40,000
31st March, 2018 30,000 3 90,000
31st March, 2019 40,000 4 1,60,000
31st March, 2019 60,000 5 3,00,000
       
Total 15 6,00,000

 

Average Profit = Total Profit for past given years
    Number of years
     
  = 6,00,000
  15
     
  = 40,000

 

Number of years’ purchase = 2
Goodwill = Average Profit X Number of years’ purchase
Goodwill = 40,000 X 2
Goodwill = 80,000

 

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Also, Check out the solved question of previous Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

  • Chapter No. 1 – Accounting Not for Profit Organisations
  • Chapter No. 2 – Partnership Accounts – I
  • Chapter No. 3 – Partnership Accounts – II (Introduction)
  • Chapter No. 4 – Partnership Accounts – III (Goodwill: Nature and Valuation)
  • Chapter No. 5 – Partnership Accounts – IV (Reconstitution of Partnership)
  • Chapter No. 6 – Partnership Accounts – V (Admission of A Partner)
  • Chapter No. 7 – Partnership Accounts – VI (Retirement and Death of A Partner)
  • Chapter No. 8 – Company Accounts (Share Capital)
  • Chapter No. 9 – Company Accounts (Issue of Debentures)
  • Chapter No. 10 – Company Accounts (Redemption of Debentures)

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

  • Chapter No. 1 – Financial Statements of a Company (Balance Sheet Only)
  • Chapter No. 2 – Techniques of Financial Statement Analysis
  • Chapter No. 3 – Ratio Analysis 
  • Chapter No. 4 – Cash Flow Statement

 

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 1 min - Question 08 Chapter 3 of +2 Part-1 - USHA Publication  12 Class Part - 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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