Retirement or Death of a partner Test

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Retirement or Death of a partner Test - 51

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Question 1
1 / -0

A,B, & C are equal partners. D is admitted to the firm for $$1/4$$th share. D brings Rs.$$20,000$$ capital and Rs.$$5,000$$ being half of the premium for goodwill.
The value of goodwill of the firm is

A
Rs.$$10,000$$

B
Rs.$$40,000$$

C
Rs.$$20,000$$

D
None of the above
Question 2
1 / -0

The profits and losses for the last years are:
Year Profit/(loss)
$$2001-2002$$ $$(20,000)$$
$$2002-2003$$ $$(5,000)$$
$$2003-2004$$ $$1,96,000$$
$$2004-2005$$ $$1,52,000$$
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. $$2,000$$p.m. not charged in the above losses/profits. Calculate the value of goodwill on the basis of $$2$$ years purchase of super profits based on the average of four years.

A
Rs. $$18,000$$

B
Rs. $$17,500$$

C
Rs. $$17,000$$

D
Rs. $$16,500$$
Question 3
1 / -0

Profits & losses for the last years are:
$$2011-2012$$ Losses Rs. $$10,000$$
$$2012-2013$$ Losses Rs. $$2,500$$
$$2013-2014$$ Profits Rs. $$98,000$$
$$2014-2015$$ Profits Rs. $$76,000$$
The average capital employed in the business is Rs. $$2,00,000$$. The rate of interest expected from capital invested is $$12\%$$. The remuneration of partners is estimated to be Rs. $$1,000$$ per month. Calculate the value of goodwill on the basis of four years purchase of super profits based on the annuity of the four years. Take discounting rate as $$10\%$$.

A
Rs. $$13,500$$

B
Rs. $$13,568$$

C
Rs. $$13,668$$

D
Rs. $$13,868$$
Question 4
1 / -0

From the following information calculate the value of goodwill.
The adjusted forecast maintainable profit is Rs. $$40,000$$, Capital employed is Rs. $$2,00,000$$, Normal rate of return is $$15\%$$, Capitalization rate is $$20\%$$.

A
Rs. $$50,000$$

B
Rs. $$75,000$$

C
Rs. $$40,000$$

D
Rs. $$60,000$$
Question 5
1 / -0

The net profits after tax of Z & Co. for the past $$5$$ years are as follows.
Year Profit
$$2007-2008$$ $$2,56,000$$
$$2008-2009$$ $$2,64,000$$
$$2009-2010$$ $$3,76,000$$
$$2010-2011$$ $$4,86,000$$
$$2011-2012$$ $$5,30,500$$
The capital employed is Rs. $$16,00,000$$. Rate if normal return is $$15\%$$. Calculate the value of the goodwill on the basis of annuity method on super-profits basis, taking the present value of an annuity of Rs. $$1$$ for the $$4$$ years at $$15\%$$ as $$2.855$$.

A
Rs. $$7,65,000$$

B
Rs. $$8,67,800$$

C
Rs. $$5,70,000$$

D
Rs. $$4,06,838$$
Question 6
1 / -0

A & B shares profit & losses equally. They admit C as an equal partner and assets were revalued as follow: Goodwill at Rs. $$30,000$$(book value NIL). Stock at Rs. $$20,000$$(book value Rs. $$12,000$$); Machinery at Rs. $$60,000$$(book value Rs. $$55,000$$). C is to bring in Rs. $$20,000$$ as his capital and the necessary cash towards his share of Goodwill. Goodwill Account will not be shown in the books. Find the profit/loss on revaluation to be shared among A, B & C.

A
$$21,500 : 21,500 : 0$$

B
$$6,500 : 6,500 : 0$$

C
$$14,333 : 14,333 : 14,333$$

D
$$4,333 : 4,333 : 4,333$$
Question 7
1 / -0

H & M are partners in a firm sharing profits and losses in the ration of $$2:5$$. They admit K as a new partner who will get $$1/6$$th share in the profits of the firm. Calculate new profit sharing ration among H, M & K.

A
$$10:25:7$$

B
$$7:25:10$$

C
$$25:10:7$$

D
$$10:7:25$$

Solution

Old ratio (H and M) = 2 : 5
K is admitted for 1/6th share of profit
Let the combined share of all partners after K's admission = 1
Combined share of H and M after K's admission = 1 - (1/6) = 5/6
New ratio = Old ratio * Combined share of H and M
H's new ratio = (2/7) * (5/6) = 10/42
M's new ratio = (5/7) * (5/6) = 25/42
K's share = 1/6 or 7/42
Therefore, new ratio of H : M : K is 10 : 25 : 7
Question 8
1 / -0

A & B shares profit & losses equally. They admit C as an equal partner and goodwill was valued at Rs.$$30,000$$ (book value NIL). C is to bring in Rs.$$20,000$$ as his capital and the necessary cash towards his share of goodwill. Goodwill Account will not remain in the books. What will be the final effect of goodwill in the partners' capital account?

A
A & B's account credited with Rs.$$5,000$$ each.

B
All partner's account credited with Rs.$$10,000$$ each

C
Only C's account credited with Rs.$$10,000$$ as cash bought in for goodwill

D
Final effect will be nil in each partner

Solution
Question 9
1 / -0

A & B are partners sharing profits in the ratio $$5:3$$, they admitted C giving him $$3/10$$th share of profit. If C acquires $$1/5$$ from A and $$1/10$$th from B, new profit sharing ratio will be _________.

A
$$5:6:3$$

B
$$2:4:6$$

C
$$18:24:38$$

D
$$17:11:12$$

Solution

Old ratio (A and B) = 5 : 3
C is admitted for 3/10th share of profit
A's sacrifice in favour of C = 1/5
B's sacrifice in favour of C = 1/10
New ratio = Old ratio - Sacrifcing ratio
A's new ratio = (5/8) - (1/5) = 17/40
B's new ratio = (3/8) - (1/10) = 11/40
C's share = 3/10 or 12/40
Therefore, new profit sharing ratio of A : B : C is 17 : 11 : 12
Question 10
1 / -0

The profits and losses for the last years are:
$$2011-2012$$ Losses Rs. $$10,000$$
$$2012-2013$$ Losses Rs. $$2,500$$
$$2013-2014$$ Profits Rs. $$98,000$$
$$2014-2015$$ Profits Rs. $$76,000$$
The average capital employed in the business is Rs. $$2,00,000$$. The rate of return expected from capital invested is $$12\%$$. The remuneration of partners is estimated to be Rs. $$1,000$$ per month not charged in the above losses/profits. Calculate the value of goodwill on the basis of two years purchase of super profits based on the average profit of $$4$$ years.

A
Rs. $$9,000$$

B
Rs. $$8,750$$

C
Rs. $$8,500$$

D
Rs. $$8,250$$

Solution

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Year	Profit/(loss)
$$2001-2002$$	$$(20,000)$$
$$2002-2003$$	$$(5,000)$$
$$2003-2004$$	$$1,96,000$$
$$2004-2005$$	$$1,52,000$$

Year	Profit
$$2007-2008$$	$$2,56,000$$
$$2008-2009$$	$$2,64,000$$
$$2009-2010$$	$$3,76,000$$
$$2010-2011$$	$$4,86,000$$
$$2011-2012$$	$$5,30,500$$

Retirement or Death of a partner Test - 51

Result

Retirement or Death of a partner Test - 51

Score

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Rank

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SHARING IS CARING

Question 1

Rs.$$10,000$$

Rs.$$40,000$$

Rs.$$20,000$$

None of the above

Question 2

Rs. $$18,000$$

Rs. $$17,500$$

Rs. $$17,000$$

Rs. $$16,500$$

Question 3

Rs. $$13,500$$

Rs. $$13,568$$

Rs. $$13,668$$

Rs. $$13,868$$

Question 4

Rs. $$50,000$$

Rs. $$75,000$$

Rs. $$40,000$$

Rs. $$60,000$$

Question 5

Rs. $$7,65,000$$

Rs. $$8,67,800$$

Rs. $$5,70,000$$

Rs. $$4,06,838$$

Question 6

$$21,500 : 21,500 : 0$$

$$6,500 : 6,500 : 0$$

$$14,333 : 14,333 : 14,333$$

$$4,333 : 4,333 : 4,333$$

Question 7

$$10:25:7$$

$$7:25:10$$

$$25:10:7$$

$$10:7:25$$

Solution

Question 8

A & B's account credited with Rs.$$5,000$$ each.

All partner's account credited with Rs.$$10,000$$ each

Only C's account credited with Rs.$$10,000$$ as cash bought in for goodwill

Final effect will be nil in each partner

Solution

Question 9

$$5:6:3$$

$$2:4:6$$

$$18:24:38$$

$$17:11:12$$

Solution

Question 10

Rs. $$9,000$$

Rs. $$8,750$$

Rs. $$8,500$$

Rs. $$8,250$$

Solution

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