12th Accountancy Weekly Test -3 (Goodwill in partnership accounts)

St. Britto Hr. Sec. School - Madurai

12th Accountancy Weekly Test -3 (Goodwill in partnership accounts)-Aug 2020

Time : 1.30 Hours

Part - A

Generic 2 - Answer All Question

The profits and losses of a firm for the last four years were as follows:
2015: Rs.15,000; 2016: Rs.17,000; 2017: Rs.6,000 (Loss); 2018: Rs.14,000
You are required to calculate the amount of goodwill on the basis of 5 years purchase of average profits of the last 4 years.

A partnership firm has decided to value its goodwill for the purpose of settling a retiring partner. The profits of that firm for the last four years were as follows:
2015: Rs.40,000; 2016: Rs.50,000; 2017: Rs.48,000 and 2018: Rs.46,000
The business was looked after by a partner. No remuneration was paid to him. The fair remuneration of the partner valued at comes to Rs.6,000 per annum.
Find out the value of goodwill, if it is valued on the basis of three years purchase of the average profits of the last four years

The following are the profits of a firm in the last five years:
2014: Rs.4,000; 2015: Rs.3,000; 2016: Rs.5,000; 2017: Rs.4,500 and 2018: Rs.3,500
Calculate the value of goodwill at 3 years purchase of average profits of five years.

Part - B

Generic 3 - Answer All Question

How is goodwill calculated under the super profits method?

Compute average profit from the following information.
2016: Rs.8,000; 2017: Rs.10,000; 2018: Rs.9,000

How is the value of goodwill calculated under the capitalisation method?

State any six factors determining goodwill.

The following particulars are available in respect of a business carried on by a partnership firm:
(a) Profits earned: 2016: Rs.30,000; 2017: Rs.29,000 and 2018: Rs.32,000.
(b) Profit of 2016 includes a non-recurring income of Rs.3,000.
(c) Profit of 2017 is reduced by Rs.2,000 due to stock destroyed by fire.
(d) The stock is not insured. But, it is decided to insure the stock in future. The insurance premium is estimated at Rs.5,600 per annum.
You are required to calculate the value of goodwill on the basis of 2 years purchase of average profits of the last three years.

Calculate the value of goodwill at 2 years purchase of average profit when average profit is Rs.15,000

From the following information relating to Arul enterprises, calculate the value of goodwill on the basis of 2 years purchase of the average profits of 3 years.
(a) Profits for the years ending 31st December 2016, 2017 and 2018 were Rs.46,000, Rs.44,000 and Rs.50,000 respectively.
(b) A non-recurring income of Rs.5,000 is included in the profits of the year 2016.
(c) The closing stock of the year 2017 was overvalued by Rs.10,000.

For the purpose of admitting a new partner, a firm has decided to value its goodwill at 3 years purchase of the average profit of the last 4 years using weighted average method. Profits of the past 4 years and the respective weights are as follows:

Particulars 2015 2016 2017 2018

Profit (Rs.) 20,000 22,000 24,000 28,000

Weight 1 2 3 4

Compute the value of goodwill.

Particulars	2015	2016	2017	2018
Profit (Rs.)	20,000	22,000	24,000	28,000
Weight	1	2	3	4

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12th Accountancy Weekly Test -3 (Goodwill in partnership accounts)

St. Britto Hr. Sec. School - Madurai

12th Accountancy Weekly Test -3 (Goodwill in partnership accounts)-Aug 2020

Part - A

Generic 2 - Answer All Question

The profits and losses of a firm for the last four years were as follows: 2015: Rs.15,000; 2016: Rs.17,000; 2017: Rs.6,000 (Loss); 2018: Rs.14,000 You are required to calculate the amount of goodwill on the basis of 5 years purchase of average profits of the last 4 years.

The following are the profits of a firm in the last five years: 2014: Rs.4,000; 2015: Rs.3,000; 2016: Rs.5,000; 2017: Rs.4,500 and 2018: Rs.3,500 Calculate the value of goodwill at 3 years purchase of average profits of five years.

Part - B

Generic 3 - Answer All Question

How is goodwill calculated under the super profits method?

Compute average profit from the following information. 2016: Rs.8,000; 2017: Rs.10,000; 2018: Rs.9,000

How is the value of goodwill calculated under the capitalisation method?

State any six factors determining goodwill.

Calculate the value of goodwill at 2 years purchase of average profit when average profit is Rs.15,000

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The profits and losses of a firm for the last four years were as follows:
2015: Rs.15,000; 2016: Rs.17,000; 2017: Rs.6,000 (Loss); 2018: Rs.14,000
You are required to calculate the amount of goodwill on the basis of 5 years purchase of average profits of the last 4 years.

The following are the profits of a firm in the last five years:
2014: Rs.4,000; 2015: Rs.3,000; 2016: Rs.5,000; 2017: Rs.4,500 and 2018: Rs.3,500
Calculate the value of goodwill at 3 years purchase of average profits of five years.

Compute average profit from the following information.
2016: Rs.8,000; 2017: Rs.10,000; 2018: Rs.9,000