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

Comment if you have any questions.

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