Aadarsh Mission High School
STD 12 Account Total Marks : 52
CH 3 NOTES
* Answer The Following Questions In One Sentence. [8]
1. What is goodwill?
2. What is revaluation of goodwill?
3. Which type of asset is goodwill?
4. Under which head goodwill is shown in the balance sheet?
5. What is capitalized profit?
6. What is super profit?
7. What is average profit?
8. What is weighted average profit?
* Answer The Following Questions With Necessary Calculations. [44]
9. Radha and Meera are partners of a firm sharing profit and loss in the ratio of
.S
2:1. Find the value of goodwill, if goodwill is to be determined on the basis of 3
years.
.H
Purchase of last 5 years average profit. The profits were :
Years 2015-16 2016-17 2017-18 2018-19 2019-20
A.M
Profit (₹) 12,000 15,000 10,000 16,000 14,000
10. Ram and Shyam are partners of a firm sharing profit and loss in the ratio of 2:1.
From the information given, calculate value of goodwill, if it is to be determined
on the basis of 3 years purchase of last 4 years average profit.
Years 2016-17 2017-18 2018-19 2019-20
Profit (₹) 1,20,000 1,60,000 -80,000 1,00,000
11. Determine the value of goodwill based on 4 years purchase of last 5 years
average profit.
Years 2015-16 2016-17 2017-18 2018-19 2019-20
Profit (₹) 80,000 1,00,000 60,000 1,20,000 1,10,000
12. From the following information find out weighted average profit.
Years 2015-16 2016-17 2017-18 2018-19
Profit (₹) 50,000 60,000 80,000 1,00,000
13. From the following information compute the value of goodwill of Aman and
Kajal's firm at 4 years' purchase of weighted average profit on the basis of last
five years.
Years 2015-16 2016-17 2017-18 2018-19 2019-20
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Profit (₹) 40,000 60,000 90,000 1,20,000 1,50,000
14. From the following information compute the value of goodwill at 3 year's
purchase of weighted average profit.
Years 2015-16 2016-17 2017-18 2018-19
Profit (₹) 1,10,000 1,00,000 80,000 70,000
15. Ganga and Kaveri are partners of a firm. They want to change the profit and
loss sharing ratio from 3 : 2 to 3 : 1 . They decided to determine the valuation of
goodwill. On the basis of the firm's profit and other information, determine the
valuation of goodwill on the basis of six years purchase of super profit.
Assets : ₹ 10, 00, 000 , Liabilites : ₹ 4,00,000, Expected rate of return 10%
Years 2016-17 2017-18 2018-19
Profit (₹) 80,000 60,000 1,00,000
16. From the following information, determine the value of goodwill on the basis of
two years purchase of super profit.
Capital employed : 3,00,000, Expected rate of return 10%
Years 2015-16 2016-17 2017-18 2018-19
Profit (₹) 20,000 40,000 50,000 60,000
.S
17. From the following information of A and B 's firm, determine the value of
goodwill by capitalised average profit method.
.H
Additional information : (1) Assets business : 10,50,000 (2) Liabilities of business
: (3) Normal expected rate of return of business is .
A.M
3, 50, 000 10%
Years 2015-16 2016-17 2017-18 2018-19 2019-20
Profit (₹) 40,000 50,000 70,000 1,00,000 1,20,000
18. From the following information of Aastha and Nishtha's firm determine the
value of goodwill by capitalised average profit method.
Years 2015-16 2016-17 2017-18 2018-19
Profit (₹) 20,500 26,800 18,900 21,200
Additional information: (1) Capital employed : 1,90,000 (2) Normal expected rate
of return of business is 10% .
19. Determine the value of goodwill of Suresh and Mukesh's firm as per the
capitalisation of super-profit method.
Additional information: (1) Capital employed : 1,00,000 (2) Expected rate of
return 12% .
Years 2016-17 2017-18 2018-19 2019-20
Profit (₹) 10,000 15,000 12,000 16,000
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