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Admission of a Partner Test - 57

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Admission of a Partner Test - 57
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Weekly Quiz Competition
  • Question 1
    1 / -0
    In case, revaluation account is not prepared, the assets & liabilities appears in the books of a reconstituted firm at their _______. 
    Solution
    When Revaluation A/c is not prepared, the assets and liabilities are recorded in a memorandum balance sheet at old book values.
  • Question 2
    1 / -0
    Opening Capital $$=$$Rs. $$5,00,000$$
    Profits during the year $$=$$Rs. $$1,00,000$$
    Calculate the Average Capital of the year.
    Solution
    Average capital = opening capital + Closing capital( WN 1)
                                 ------------------------------------------------
                                                                2
                                = 5,00,000 + 6,00,000
                                  ----------------------------------
                                                   2
                               = Rs-5,50,000
    Working note : -
    1) Closing capital = Opening capital + Profit earned 
                                 = 5,00,000 + 1,00,000
                                = 6,00,000
  • Question 3
    1 / -0
    Total Capital Employed in the firm Rs. 16,00,000.
    Reasonable Rate of Return 15%.
    Profits for the year Rs. 24,00,000.
    The value of goodwill using capitalization method is _________. 
    Solution

  • Question 4
    1 / -0
    A firm has an average profit of Rs 60,000. Rate of return on capital employed is 12.5% p.a. Total capital employed is Rs 4,00,000. Goodwill is to be calculated on the basis of two years purchase of super profit. Find the amount of goodwill?
    Solution
    Calculation of Goodwill by Super profit method 
    Goodwill = Super profit * No. purchase years
                    = 10000 * 2
                    = 20000
    Super profit = Average profit - Normal Profit
                         = 60000 - 50000
                         = 10000
    Normal Profit = Capital employed * Rate / 100
                            = 400000 * 12.5 / 100
                            = 50000
  • Question 5
    1 / -0
    The profits and losses for the last 4 years are Losses Rs. 20,000; Losses Rs. 5,000; Profits Rs. 1,96,000 & Profits Rs. 1,52,000.The average capital employed in the business is Rs. 4,00,000. The rate of interest expected from capital invested is 12%. The remuneration of partners is estimated to be Rs. 2,000 per month. The value of goodwill from two years' purchase of super profits based on the average of four years is __________. 
    Solution

  • Question 6
    1 / -0
    The profits for Year I are Rs 4,000; for Year ll is Rs.52,200, and for Year lll is Rs. 62,400. Closing stock for Year ll and Year lll includes the defective items of Rs. 4,400 and Rs. 12,400 respectively which were considered as having market value NIL. The value of goodwill on average profit method is ________. 
    Solution

  • Question 7
    1 / -0
    The following particulars are available in respect of the business carried on by a partnership firm:
    Trading Results:
    Year I             Loss         Rs. 10,000
    Year Il            Loss         Rs. 12,000
    Year Ill           Profit        Rs. 1,50,000
    Year IV          Profit        Rs. 1,20,000
    The value of goodwill on the basis of 5 years purchase of the average profit of the business is _________. 
    Solution

  • Question 8
    1 / -0
    X and Y are partners in a firm with the capital of Rs. 18,000 and Rs. 20,000. Z was admitted with 1/3rd share of profit and brings Rs. 24,000 as capital, calculate the amount of goodwill.
    Solution
    Capital of the firm according to the capital of Z= Rs. 24000 x 3/1
                                                                                  = Rs. 72000
    Actual total capital of the firm= Rs. (18000+20000+24000)
                                                     = Rs. 62000
    Value of goodwill= Rs. 72000 (-) 62000
                                 = Rs. 10000
    Therefore, D is the correct option.
  • Question 9
    1 / -0
    The profits and losses for the last years are:  l year Losses Rs.20,000; ll year Losses Rs. 5,000; lll year profits Rs.1,96,000 & IV year profits Rs. 1,52,000. The average capital employed in the business is Rs. 4,00,000. The rate of interest expected from capital invested is 12%. The remuneration of partners is estimated to be Rs, 2,000 per month. The value of goodwill by four years purchase of super profits based on the annuity of the four years. ( Take discounting rate as 10%) is ________.
  • Question 10
    1 / -0
    A firm earned the net profit during the last 3 years as follow:
    2001Rs. 15,000
    2002Rs. 20,000
    2003Rs. 25,000
    The capital investment in the firm is rs 1,00,000. Having regard to the risk involved 15% is the fair return on basis of 2 years purchase of average Super profit earned during 3 years is:
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