Question 9 Chapter 3 of Class 12 Part – 1 Usha Publication

Question 09 Chapter 3 of +2-Part-1

9. (Weighted Average Profit Method) Calculate the value of goodwill of a firm on the basis of three years purchase of the weighted average profit of the last four years. The profits of last four years were:

 Year Profit/Loss 2014-15 5,000 2015-16 5,200 2016-17 9,300 2017-18 10,700

During 2014-15, there was abnormal loss of Rs.1,000 due to theft and in 2017-18 there was a profit from sale of land amounting to Rs.4,000. In 2015-16, closing stock was over valued by Rs.1,200. The weights are 1,2,3 and 4 for the year 2014-15,2015-16,2016-17 and 2017-18 respectively.

The solution of Question 09 Chapter 3 of +2 Part-1: –

Day - 53 | Questions of Goodwill Ch. 3 Partnership - II | Accounts class 12 | PSEB | Sarbjit Singh |

 Calculation of Adjusted Profit Particulars / Year Ended 2014-15 2015-16 2016-17 2017-18 Profit/(Loss) 5,000 5,200 9,300 10,700 Add: Abnormal Loss 1,000 Less: Profit on sale of land -4,000 Less: Overvaluation of Closing Stock – 1,200 Add: Overvaluation of Opening Stock 1,200 Total 6,000 4,000 10,500 6,700
 Calculation of Weighted Average Profit Year Adjusted Profit (A) Weight (D) Product (E = C * D) 2014-15 6,000 1 6,000 2015-16 4,000 2 8,000 2016-17 10,500 3 31,500 2017-18 6,700 4 26,800 Total 10 72,300
 Weighted Average Profit = Total weight Profit for past given years Total weight = 72,300 10 = 7,230
 Number of years’ purchase = 2 Goodwill = Weighted Average Profit X Number of years’ purchase Goodwill = 7,230 X 3 Goodwill = 21,690

Comment if you have any questions.

Comment if you have any questions.

End of Solution

Check Out the Solution of all questions of this chapter:

The solution to all questions of Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation) Class 12 Usha Publication – 2024 is shown as follows, click on the image of the question to get the solution.

Thanks for completing the chapter. If you understand the question or we have helped you with your homework, please share our website on your social media. We are delighted to help you out.

Thanks again.

Download a PDF of Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation):

If you want to download a PDF of this chapter then you can do it. Check out our PDF file on our Store page.

Chapter-Wise Solution of Usha Publication Accountancy – Part 1 Class 12 – Session 2024-25 as per the PSEB curriculum

Check out Solutions to all questions of the every chapter shown as under. The Solution of Accountancy – Part 1 Class 12 – Session 2024-25 is provided as per the new book published by Usha Publication.

Chapter No. 1 – Accounting Not-for-Profit Organisations (Deleted from the Syllabus)

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)

Check out Part 2 of both books.

In Class 12th the accountancy has 2 books i.e. Part 1 and Part 2. The Books related to the Part 1 are shown above. but If you want to know more about Part 2, you can check it out from the following links. We have provided the links to both books i.e. Accountancy Part 2 by Usha Publication and Advanced Accountancy Part 2 by Unimax Publication.

1. Accountancy – Part 2 Class 12 – Session 2024-25 By Usha Publication

2. Advanced Accountancy Part 2 Class 12 by Unimax Publication