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

Question 12 Chapter 3 of +2- Part-

Question 12 Chapter 3 of +2-Part-1

12. (Super Profit Method) A firm has total assets of Rs.2,50,000 including cash of Rs.30,000.The creditors are Rs.40,000. Normal rate of return is 10% on capital employed. Goodwill of the firm is valued at Rs.1,20,000 at four years purchase of super profits. Find the average profits.

 

The solution of Question 12 Chapter 3 of +2 Part-1: – 

 

Capital Employed = Total Assets – Liabilities
  = 2,50,000 – 40,000
  = 2,10,000
Number of years’ purchase = 3
Goodwill = Super Profit X Number of years’ purchase
Goodwill = 2,200 X 3
Goodwill = 6,600

 

Average Profit = Capital Employed X Normal Rate of Return
  100
         
  = 2,10,000 X 10
  100
         
  = 21,000    
Goodwill of Firm = 1,20,000(Given)    

 

Super Profit = Firm Goodwill
  Number of years
     
  = 1,20,000
  4
     
  = 30,000

 

 

Average Profit = Normal Profit + Super Profit
  = 21,000 + 30,000
  = 51,000

 

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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 12 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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