A firm earned profits of ₹ 80,000, ₹ 1,00,000, ₹ 1,20,000 and ₹ 1,80,000 during 2010-11, 2011-12, 2012-13 and 2013-14 respectively. The firm has capital investment of ₹ 5,00,000
Solution:-
Commerce School
Student Community
Archives Answers
Answer
Calculate the value of goodwill on the basis of three year’s purchase of the weighted average profits of the last five years. Profits to be weighted 1, 2, 3, 4 and 5, the greatest weightage to be given to last year. Profits of the last five years were
Solution:-
Following information is available about the business of a firm: Profits : In 2022, ₹ 40,000; In 2023, ₹ 50,000; In 2024, ₹ 60,000 Non-recurring income of ₹ 1,000 is included in the profits of 2023
Solution:-
The profits earned by a firm during the last four years were as follows: Profits ₹ 80,000
Solution:-
A, B and C are partners sharing profits and losses equally. They agree to admit D for equal share. For this purpose goodwill is to be valued at 3 year’s purchase of average profits of last 5 years which were as follows:
Solution:-
A, B and C are partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. They decide to take D into partnership for 1/4th share on 1st April, 2022. For this purpose, goodwill is to be valued at 3 times the average annual profits of the previous four or five years whichever is higher
Solution:-
X purchased the business of Y from 1st April, 2023. For this purpose goodwill is to be valued at 100% of the average annual profits of the last four years. The profits shown on Y’s business for the last four years were:
Solution:-
The goodwill of a firm is valued at 4 year’s purchase of average profits of last five years. The profits of the last five years were:
Solution:-
Mahesh, Naresh and Om were partners sharing profits in the ratio of 2 : 3 : 4. With effect from 1st April, 2023 they agreed to share profits in the ratio of 1 : 2 : 3. Calculate each partner’s gain or sacrifice due to change in ratio
Solution:-
A, B and C were in partnership sharing profits in the ratio of 4 : 3 : 1. The partners agreed to share future profits in the ratio of 5 : 4 : 3
Solution:-