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Question 22 Chapter 3 of USHA Publication 12 Class Part – 1

Question 22 Chapter 3 of +2 Part-1 - USHA Publication 12 Class Part - 1
Question 22 Chapter 3 of +2 Part-1 - USHA Publication 12 Class Part - 1

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Question 22 Chapter 3 of USHA Publication 12 Class Part – 1

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22. (Super Profit Method) A partnership firm earned net profit during the last three years as follows :

Year N/P
20081,90,000
20092,20,000
20102,50,000

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
20081,90,000
20092,20,000
20102,50,000
   
Average Adjusted profit=Total adjusted profit
  No. of year purchases
 =1,20,000

 

Normal Profit=Capital EmployedXNormal Rate of Return
 100
     
 =4,00,000X15
 100
     
 =60,000  

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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 ProfitX100
 Normal Rate of Return
     
 =1,20,000X100
 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

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

 

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

+2 Book 1-min
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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