Ajit and Baljit were sharing profits in the ratio of 3 : 2. They admit Chaman into the partnership for 1/6th share of future profits.
Ajit and Baljit were sharing profits in the ratio of 3 : 2.
They admit Chaman into the partnership for 1/6th share of future profits. Goodwill, valued at 4 times the average super profit of the firm, was ₹ 18,000.
The firm had assets worth ₹ 15,00,000 and liabilities ₹ 12,00,000.
The normal earning capacity of such firms is expected to be 10%.
Find the Average Profit/Actual Profit earned by the firm.
Anurag Pathak Changed status to publish April 19, 2023
Solution:-
Capital Employed = Assets – Liabilities
Capital Employed = 15,00,000 – 12,00,000 = ₹ 3,00,000
Normal Profit = 3,00,000 × 10% = ₹ 30,000
Goodwill = ₹ 18,000
Goodwill = Super Profit × 4 year’s purchase
Super Profit = 18,000/4 = ₹ 4,500
Average Profit = Normal Profit + Super Profit
Average Profit = 30,000 + 4500 = ₹ 34,500
Anurag Pathak Changed status to publish April 19, 2023
