Fundamentals of...

Naman, Manik and Arpit are partners sharing profits and losses in the ratio of 5 : 3 : 2. The partnership deed provides for charging interest on drawing’s @ 10% p.a. The drawings of Naman, Manik and Arpit during the year ending December 2004 amounted to Rs. 20,000, Rs. 15,000 and  Rs. 10,000 respectively. After the final accounts have been prepared, it was discovered that interest on drawings has not been taken into consideration. Give necessary adjusting entry.

Match the following

What values are involved in the rectification of past adjustments:

Following are the examples of the said errors and omissions except:

Goodwill is capitalized valued of ____.

Goodwill is capitalized valued of ____.

Verma Brothers earn a profit of Rs. 90,000 with a capital of Rs. 4,00,000. The normal rate of return in the business is 15%. Use Capitalization of super profit method to value the goodwill.

Profit and Loss adjustment account is differ from Profit and Loss Appropriation account which is prepared to show the effect of

The average net profits expected of a firm in future are Rs.68,000 per year and capital invested in the business by the firm is Rs.3,50,000. The rate of interest expected from Capital invested in this class of business is 12%. The remuneration of the partners is Estimated to be Rs.8,000 for the year. You are required to find out the super profit.

Types of goodwill are

In the case of going concern when business is not to be sold, it becomes necessary to value goodwill whenever the mutual rights of the partners change. A party which is making a sacrifice must be compensated and that is normally on the basis of ______.

________ is the excess of actual profit over normal profit.

When a product plays important role in increasing the goodwill of the firm, what factor is mainly responsible for that?

Formula for capitalization of Average Profit is

Calculate goodwill at twice the weighted average profits of last four years’ profits. The profits of the last four years were:

For calculation of capital in the beginning what should be added in the capital at the end of the year

X, Y and Z are partners in a firm who share profits in the ratio of 2:3:5. The firm earned a profit of Rs.1,50,000 for the year ended December 31,2004. The profit by mistake was distributed among X, Y and Z in the ratio of 3:2:1 respectively. This error was noted only in the beginning of the next year. Pass necessary Journal entry to rectify the error.

When the business is taken over by another business, the excess of purchase consideration over its net value asset is referred to as ____.

A firm earns Rs. 65,000 as its average profits. The usual rate of earning is 10%. The total assets of the firm amounted to Rs. 6,80,000 and liabilities are Rs.1,80,000. Calculate the value of goodwill.

A firm earned net profits during the last three years as

The capital investment of the firm is Rs.1,20,000. A fair return on the capital having regard to the risk involved is 10%. Calculate the value of goodwill on the basis of three year's purchase of the super profit for the last three year.

On 31st March 2013 closing capital of A, B and C showed balance of Rs. 20,000, Rs.18,000 and Rs.12,000 respectively. The profit for the year ended was Rs.36,000 and partners drawings had been A Rs.3,600, B Rs.4,500 and C Rs.2,700. Calculate opening capital.

Business showed that the capital employed on January 1, 2007 was Rs. 4,50,000 and the profits for the last five years were as follows: 2007-Rs. 40,000; 2008 -Rs.50,000; 2009- Rs. 60,000; 2010 -Rs. 70,000 and 2011 -Rs.80,000.You are required to find out the value of goodwill, based on three year's purchase of the super profit of the business given that the normal rate of return is 10%.

L, M and N are partners in a firm sharing profit and loss in the ratio of 2:3:5. Their fixed capitals were Rs.15,00,000, Rs. 30,00,000 and Rs. 60,00,000 respectively. For the year 2011 interest on capital was credited to them @ 12% instead of 10 %. Pass the necessary Journal entry.

Calculate the average profit of last four year's profits. The profits of the last four years were:

Goodwill is an __________ asset.