Advertisements
Advertisements
प्रश्न
Write a word/phrase/term which can substitute the following statement.
Method under which calculation of goodwill is done on the basis of extra profit earned above the normal profit.
Advertisements
उत्तर
Method under which calculation of goodwill is done on the basis of extra profit earned above the normal profit - Super Profit Method
APPEARS IN
संबंधित प्रश्न
Hemant and Nishant were partners in the firm sharing profits in the ratio of 3:2. Their capitals were Rs 1,60,000 and Rs 1,00,000 respectively. They admitted Somesh on 1st April 2013 as a new partner for 1/5 share in the future profits. Somesh brought Rs 1,20,000 as his capital. Calculate the value of goodwill of the firm and record necessary journal entries for the above transactions on Somesh's admission.
How does the nature of business affect the value of goodwill of a firm?
State True or False with reason.
When goodwill is written off, goodwill amount is debited.
Explain how will you deal with goodwill when new partner is not in a position to bring his share of goodwill in cash ?
Asin and Shreyas are partners in a firm. They admit Ajay as a new partner with 1/5th share in the profits of the firm. Ajay brings ₹ 5,00,000 as his share of capital. The value of the total assets of the firm was ₹ 15,00,000 and outside liabilities were valued at ₹ 5,00,000 on that date. Give the necessary Journal entry to record goodwill at the time of Ajay's admission. Also show your workings.
Anil and Sunil are partners in a firm with fixed capitals of ₹ 3,20,000 and ₹ 2,40,000 respectively. They admitted Charu as a new partner for 1/4th share in the profits of the firm on 1st April, 2012. Charu brought ₹ 3,20,000 as her share of capital.
Calculate value of goodwill and record necessary Journal entries.
Mohan and Sohan were partners in a firm sharing profits and losses in the ratio of 3 : 2. They admitted Ram for 1/4th share on 1st April, 2019. It was agreed that goodwill of the firm will be valued at 3 years' purchase of the average profit of last 4 years ended 31st March, were ₹ 50,000 for 2015-16, ₹ 60,000 for 2016-17, ₹ 90,000 for 2017-18 and ₹ 70,000 for 2018-19. Ram did not bring his share of goodwill premium in cash. Record the necessary Journal entries in the books of the firm on Ram's admission when:
(a) Goodwill appears in the books at ₹ 2,02,500.
(b) Goodwill appears in the books at ₹ 2,500.
(c) Goodwill appears in the books at ₹ 2,05,000.
A and B are partners sharing profits in the ratio of 2 : 1. They admit C for a `1/4`th share in profits. C brings in ₹ 30,000 for his capital and ₹ 8,000 out of his share of ₹ 10,000 for goodwill. Before admission, goodwill appeared in books at ₹ 18,000. Give Journal entries to give effect to the above arrangement.
Hints:
- Goodwill of ₹ 18,000 written off by A and B in 2 : 1.
- Goodwill of ₹ 8,000 brought in cash by C will be credited to the Premium for Goodwill A/c.
- Premium for Goodwill A/c will be debited by ₹ 8,000 and C’s Current A/c will be debited by ₹ 2,000 and the Capital Accounts of A and B will be credited in 2 : 1.
State True or False with reason.
A new partner always bring his share of goodwill in cash.
State True or False with reason.
Cash/ Bank Account is credited when goodwill is withdrawn by the old partners.
Find the Odd one.
What is the super profit method of calculation of goodwill?
Amount brought by a new partner for his share in goodwill is known as _____________.
In the absence of partnership deed, interest on capital and drawing to be:
Value of reputation of the firm is:
The amount of goodwill is paid by the new partner:
What would be the journal entry for revaluation of an increase in the value of a liability?
Excess value of Purchase Consideration over Net Assets at the time of purchase of business is credited to:
Identify the formula for calculating goodwill with the help of capitalised method of super profit.
How is Goodwill of the firm created?
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.
Profit for 2015, 2016 & 2017 is ₹ 10,000, ₹ 15,000 & ₹ 25,000. Calculate average profit.
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 ______.
______ means profit which is earned over and above the normal profit.
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.
