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Total of Assets side of the Balance Sheet – ₹ 25,00,000, Debit Balances in Current Account of Naresh and Vikesh – ₹ 75,000 and ₹ 25,000 respectively; Bank Loan ₹ 8,00,000; Goodwill ₹ 1,00,000; Trade Investments – ₹ 25,000; Profit and Loss Accounts (Debit) – ₹ 15,000.

Ans – d) Explanation:- Capital Employed = Total Assets – Goodwill – Profit and Loss Account (Dr) Balance – Bank Loan – Debit balances of partner’s Current Account Capital Employed = ₹ 25,00,000 – ₹ 1,00,000 – ₹ 15,000 –…

Capital Accounts of Partners Naresh and Vikesh – ₹ 5,00,000 each; Balances in Current Accounts of Naresh and Vikesh – ₹ 50,000 and ₹ 40,000 respectively; Bank Loan – ₹ 10,00,000; Goodwill ₹ 50,000; Investments – ₹ 25,000; Advertisement Suspense – ₹ 15,000. Based on the above information, Capital Employed for the purposes of the valuation of Goodwill will be

Ans – c) Explanation:- Capital Employed = Partner’s Capital + Partner’s Current account Balances – Goodwill – Investments – Advertisement Suspense Capital Employed = 5,00,000 + 5,00,000 + 50,000 + 40,000 – 50,000 – 25,000 – 15,000 Capital Employed =…

The average Profit of the firm is ₹ 6,00,000. Total tangible Assets in the firm are ₹ 28,00,000 and Outside Liabilities are ₹ 8,00,000. In the same type of business, the normal rate of return is 20% of the capital employed. Calculate the value of goodwill by Capitalisation of the Super Profit Method.

Ans – a) Explanation:- Capital Employed = Tangible Assets – Outside Liabilities Capital Employed = 28,00,000 – 8,00,000 Capital Employed = ₹ 20,00,000 Normal Profit = Capital Employed × Normal Rate of Return Normal Profit = 20,00,000 × 20% Normal…