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प्रश्न
On 1st April, 2020, Anish started a business with a capital of ₹ 3,00,000.
During the three years ending 31st March, 2023, the results of his business were:
| Year | (₹) | |
| 2020-21 | Loss | 20,000 |
| 2021-22 | Profit | 34,000 |
| 2022-23 | Profit | 46,000 |
From the year 2020-21 to the year 2022-23, Anish withdrew ₹ 30,000 from the firm for his personal use.
On 1st April, 2023, he admitted Danish into partnership on the following terms:
- Goodwill of the firm to be valued at two years’ purchase of the average profits of the last three years.
- Danish to have a `1/4` share in the future profits.
- Danish’s capital is to be equal to `1/4` of Anish’s capital determined on 1st April, 2023, after the goodwill compensation has been taken into account.
You are required to give:
- The formula to calculate goodwill by the Average Profit Method.
- The value of self-generated goodwill of the firm.
- Danish’s capital contribution.
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उत्तर
i.
Formula to calculate goodwill by Average Profit method: `"Average Profit" = ("Total profits of given years")/("Total number of years")`
Goodwill = Average profit × Number of years purchase
ii.
Calculation of value of self-generated goodwill:
`"Average Profit" = ("Loss of (2020−21) + Profit of (2021−22) + Profit of (2022−23)")/3`
`= ((20,000) + 34,000 + 46,000)/3`
`= (80,000 - 20,000)/3`
`= (60,000)/3`
= ₹ 20,000
Average profit = ₹ 20,000
No. of years purchase = 2
Goodwill = 20,000 × 2
= ₹ 40,000
iii.
Calculation of Danish’s Capital contribution
Danish’s share of goodwill = `40,000xx1/4` = ₹ 10,000
Adjusted Capital of Anish on 1st April, 2023:
| Particulars | Amount (₹) |
| Capital as on 1st April 2020 | 3,00,000 |
| Add: Total Profit of last 3 Years | 60,000 |
| Add: Goodwill Compensation from Danish | 10,000 |
| 3,70,000 | |
| Less: Drawings of last 3 Years | 30,000 |
| 3,40,000 |
Danish’s capital contribution = `(3,40,000)/4`
= ₹ 85,000
संबंधित प्रश्न
State 'True' or 'False'
When goodwill is paid privately, no entry in the books of account is required.
Madan and Gopal are partners sharing profits in the ratio of 3 : 2. They admit Sooraj for 1/3rd share in profits on 1st April, 2019. They also decide to share future profits equally. Goodwill of the firm was valued at ₹ 5,50,000. Goodwill existed in the books of account at ₹ 1,00,000, which the partners decide to carry forward.
Sooraj is unable to bring his share of goodwill. Pass the necessary Journal entries on admission of Sooraj, if:
(a) Goodwill is not to be raised and written off; and
(b) Goodwill is to be raised and written off.
On the admission of Rao, goodwill of Murty and Shah is valued at ₹ 30,000. Rao is to get 1/4th share of profits. Previously Murty and Shah shared profits in the ratio of 3 : 2. Rao is unable to bring amount of goodwill. Give Journal entries in the books of Murty and Shah when:
(a) there is no Goodwill Account and
(b) Goodwill appears in the books at ₹ 10,000.
Anu and Bhagwan were partners in a firm sharing profits in the ratio of 3 : 1. Goodwill appeared in the books at ₹ 4,40,000. Raja was admitted to the partnership. The new profit-sharing ratio among Anu, Bhagwan and Raja was 2 : 2 : 1. Raja brought ₹ 1,00,000 for his capital and necessary cash for his goodwill premium. Goodwill of the firm was valued at ₹ 2,50,000. Record necessary Journal entries in the books of the firm for the above transactions.
A and B are partners in a firm sharing profits and losses in the ratio of 3 : 2. They admit C into partnership for 1/5th share. C brings ₹ 30,000 as capital and ₹ 10,000 as goodwill. At the time of admission of C, goodwill appeared in the Balance Sheet of A and B at ₹ 3,000. New profit-sharing ratio of the partners will be 5 : 3 : 2. Pass necessary Journal entries.
In the absence of partnership deed, interest on capital and drawing to be:
Doremon, Shinchan and Nobita are partners sharing profits and losses in the ratio of 3 : 2 : 1. With effect from 1st April, 2022 they agree to share profits equally. For this purpose, goodwill is to be valued at two year’s purchase of the average profit of the last four years which were as follows:
| Year ending on 31st March, 2019 | ₹ 50,000 (Profit) |
| Year ending on 31st March, 2020 | ₹ 1,20,000 (Profit) |
| Year ending on 31st March, 2021 | ₹ 1,80,000 (Profit) |
| Year ending on 31st March, 2022 | ₹ 70,000 (Loss) |
On 1st April, 2021 a Motor Bike costing ₹ 50,000 was purchased and debited to travelling expenses account, on which depreciation is to be charged @ 20% p.a by Straight Line Method. The firm also paid an annual insurance premium of ₹ 20,000 which had already been charged to Profit and Loss Account for all the years.
Journalise the transaction along with the working notes.
Fill in the blank.
______ = `("Total Profit")/("Number of Years")`
Nita and Samar are partners in a firm sharing profits in the ratio of 3 : 2. Their fixed capitals were ₹ 90,000 and ₹ 2,10,000 respectively. They admitted Mitali on April 1, 2022 as a new partner for 1/5th share in future profits. Mitali brought ₹ 1,50,000 as her capital. The value of goodwill of the firm of Mitali's admission was ______.
Goodwill is to be valued on the basis of 2 years purchases of last 5 years average profit. The profits and losses of last five years were as follows :
| Year | 1 | 2 | 3 | 4 | 5 |
| Amount (₹) | 30,000 (Profit) |
40,000 (Profit) |
70,000 (Profit) |
30,000 (Loss) |
50,000 (Profit) |
Find out value of Goodwill.
