The Capital of the firm of Anuj and Benu is ₹ 10,00,000 and the market rate of interest is 15%. The annual salary of the partners is ₹ 60,000 each. The profit for the last three years were ₹ 3,00,000; ₹ 3,60,000 and ₹ 4,20,000.
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Raman and Daman are partners sharing profits in the ratio of 60 : 40 and for the last four years they have been getting annual salaries of ₹ 50,000 and ₹ 40,000 respectively. The annual accounts have shown the following net profit before charging partner’s salaries:
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Profits of a firm for the year ended 31st March for the last five years were:
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Sumit purchased Amit’s business on 1st April 2023. Goodwill was decided to be valued at two years’ purchase of average normal profit of the last four years. The profits for the past four years were:
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Bhaskar and Pillai are partners sharing profits and losses in the ratio of 3 : 2. They admit Kanika into the partnership for 1/4th share in profit. Kanika brings her share of goodwill in cash. Goodwill for this purpose is to be calculated at two years’ purchase of the average normal profit of the past three years. Profits for the last three years ended 31st March were:
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Abhay, Babu, and Charu are partners sharing profits and losses equally. They agree to admit Daman for an equal share of profits. For this purpose, the value of goodwill is to be calculated on the basis of four years’ purchase of the average profit of the last five years. These profits for the year ended 31st March were:
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Tarang purchased Jyoti’s business with effect from 1st April 2023. Profits shown by Jyoti’s Business for the last three financial years ended 31st March were:
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Madhu and Vidhi are partners sharing profits in the ratio of 3 : 2. They decided to admit Manu as a partner from 1st April 2023 on the following terms:
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Asin and Shreyas were partners sharing profits and losses in a ratio of 2 : 1. They admitted Shyam as a partner for 1/5th share in profits. For this purpose, the Goodwill of the firm was to be valued on the basis of three years’ purchase of the last five years’ average profit. Profits for the last five years ended 31st March were:
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Purav and Purvi are partners in a firm sharing profits and losses in a ratio of 2 : 1. They admit Parv into a partnership for 1/4th share on 1st April 2023. For this purpose, goodwill is to be valued at four times the average annual profit of the previous four or five years, whichever is higher.
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