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The document consists of various accounting problems related to the calculation of goodwill based on different methods, including average profit and weighted average profit. It also includes scenarios involving changes in profit-sharing ratios among partners and the valuation of goodwill under specific conditions. Additionally, it contains multiple-choice questions regarding the nature of goodwill and its representation in financial statements.

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64 views2 pages

Acc 3

The document consists of various accounting problems related to the calculation of goodwill based on different methods, including average profit and weighted average profit. It also includes scenarios involving changes in profit-sharing ratios among partners and the valuation of goodwill under specific conditions. Additionally, it contains multiple-choice questions regarding the nature of goodwill and its representation in financial statements.

Uploaded by

vaishnavi cool
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Accountancy Paper- 3 MM- 25

1. Calculate the value of goodwill on basis of 3-year purchase of average profit for the last 5 years. The
profit of last 5 year is as follows:
2014-15 ₹ 2,50,000
2015-16 ₹ 3,00,000
2016-17 ₹ (50,000) Loss
2017-18 ₹ 4,50,000
2018-19 ₹ 2,60,000
Additional Information:
During the third year, goods destroyed by fire ₹ 4,00,000. Claim received from insurance company ₹
1,50,000.
During the fifth year, income from investment ₹ 50,000.
During the forth year, income tax refund ₹ 60,000.
During the fifth year, closing stock over valued by ₹ 70,000.
Calculate the value of goodwill. (4)

2. Goodwill of the firm is to be valued on the basis of 3-year purchase of weighted average profit.
Weights assigned to each year would be year ended: 31, March 2015 – 1; 31, March 2016 – 2; 31, March
2017 – 3; 31, March 2018 – 4; 31, March 2019 – 5.
Profits for the year are as follows:
31, March 2015 – ₹ 1,00,000
31, March 2016 – ₹ 1,20,000
31, March 2017 – ₹ 1,80,000
31, March 2018 – ₹ 50,000
31, March 2019 – ₹2,00,000
Additional Information
Abnormal loss during the year ended 31, March 2018 ₹1,00,000.
Overvaluation of closing stock during the year ended 31, March 2019 ₹20,000.
During the year ended 31 March 2015, abnormal gain ₹10,000. (4)

3. The profits for the last five years of a firm were as follows –
year 2013-14 ₹ 1,92,000;(Including Abnormal Gain ₹ 15,000 on profit on the sale of fixed assets)
year 2014-15 ₹ 95,000; (After debiting Loss of stock by fire ₹75,000)
year 2015-16 ₹ 1,23,000;(Including interest on Non-trade Investment ₹ 10,000)
year 2016-17 ₹ 1,30,000. ( Closing Stock overvalued by 10,000 at the end of the financial year 2017)
Calculate the value of goodwill of the firm on the basis of 2 years purchase of average profit for the last
four years. (4)

4. Aastha, Asha, and Babita are partners sharing profits and losses in the ratio of 3:2:1 respectively. From
1st April 2022, they decided to change their profit sharing ratio to 2:1:3. Their partnership deed provides
that in the event of any change in the profit changing ratio, the goodwill of the firm should be valued at
three years’ purchase of the average super-profits for the past three years.
The actual profits and losses for the past three years were:
2021-22 Profit ₹ 40,000.
2021-21 Profit ₹ 30,000.
2019-20 Loss ₹ 10,000.
The average capital employed in the business was ₹ 1,10,000; the rate of interest expected from capital
invested was 10%. You are required to Calculate the value of goodwill at the time of change in profit
sharing ratio. (4)

5. From the following information, calculate value of goodwill of M/s Amrit & Amar:
(i) At three years' purchase of Average Profit.
(ii) At three years' purchase of Super Profit.
(iii) On the basis of Capitalisation of Super Profit.
(iv) On the basis of Capitalisation of Average Profit.

Information:
(a) Average Capital Employed — ₹10,00,000
(b) Net Profit/Loss of the firm for the past years:
2021 — ₹1,60,000 (Profit);
2022 — ₹1,40,000 (Profit);
2023 — ₹2,70,000 (Profit)
(c) Normal Rate of Return on capital is 11%
(d) Remuneration to each partner for his service to be treated as a charge on profit — ₹2,500 per month
(e) Assets (excluding goodwill) — ₹11,00,000; Liabilities — ₹1,00,000 (6)

6. Goodwill is: (1)


A. A current asset
B. A fictitious asset
C. An intangible asset
D. A wasting asset

7. Goodwill is generally not shown in the books of accounts unless: (1)


A. The firm earns high profits
B. It is purchased
C. Partners agree
D. Business is revalued

8. In Capitalisation of Super Profit Method, goodwill = (1)


A. Capital Employed – Super Profit
B. Super Profit × NRR
C. Super Profit ÷ NRR × 100
D. Average Profit ÷ NRR × 100

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