Question 22 Chapter 3 of USHA Publication 12 Class Part – 1
Table of Contents
22. (Super Profit Method) A partnership firm earned net profit during the last three years as follows :
| Year | N/P |
| 2008 | 1,90,000 |
| 2009 | 2,20,000 |
| 2010 | 2,50,000 |
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 22 Chapter 3 of USHA Publication 12 Class Part – 1: –
| Year | N/P |
| 2008 | 1,90,000 |
| 2009 | 2,20,000 |
| 2010 | 2,50,000 |
| Average Adjusted profit | = | Total adjusted profit |
| No. of year purchases | ||
| = | 1,20,000 |
| Normal Profit | = | Capital Employed | X | Normal Rate of Return |
| 100 | ||||
| = | 4,00,000 | X | 15 | |
| 100 | ||||
| = | 60,000 |
| Calculation of Super Profit | = | Average Adjusted Profit – Normal Profit |
| = | 1,20,000 – 60,000 | |
| = | 60,000 | |
| Calculation of Super Profit | = | Average Adjusted Profit – Normal Profit |
| Goodwill | = | 1,20,000 – 60,000 |
| Goodwill | = | 60,000 |
| Capitalised value of the Goodwill | = | Super Profits x Number of years’ purchase |
| = | 60,000 x 2 | |
| = | 1,20,000 |
| ii) Capitalisation of Business : | ||||
| Goodwill | = | Average Profit | X | 100 |
| Normal Rate of Return | ||||
| = | 1,20,000 | X | 100 | |
| 15 | ||||
| = | 8,00,000 |
| Goodwill | = | Capitalised value of the business – Average Capital |
| = | 8,00,000 – 4,00,000 | |
| = | 4,00,000 |
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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 (Introduction)
- Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
- Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
- 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
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis- Comparative and Common Size
- Chapter No. 4 – Ratio Analysis
- Chapter No. 5 – Cash Flow Statement
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