# Question 11 Chapter 3 of Class 12 Part – 1 VK Publication

Question 11 Chapter 3 of Class 12 Part - 1 VK Publication

Question 11 Chapter 3 of Class 12 Part – 1

11. On 1st April, 2018, a partnership firm had assets: Land-Rs. 60,000; Furniture-Rs. 10,000; Debtors- Rs. 5,000; Bills Receivable- Rs. 10,000; Cash- Rs. 15,000. The partners’ capital accounts showed a balance of Rs. 85,000 and the rest contributed reserves. If the normal rate of return is 10% and the goodwill of the firm is valued at Rs 30,000 at six years’ purchase of super profits, find the average profits of the firm.

## The solution of Question 11 Chapter 3 of Class 12 Part – 1: –

Capital Employed = Total Assets – External Liability
= ( Land+ Furniture+ Debtors+ Bills Receivable+Rent Paid in Advance+ Cash)- External Liabilities
= (60,000+10,000+5,000+10,000+15,000)-NIL = Rs. 1,00,000
Normal Profit= 1,00,000 ×10/100= Rs. 100,000
Goodwill= Super Profit x Number of Years’ purchase
30,000= Super Profit x 6
Super Profit= Rs. 5,000
Average Profit=Super Profit+ Normal Profit
= 5,000+10,000= Rs. 15,000

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