Test: Treatment Of Goodwill In Partnership Accounts - 3


28 Questions MCQ Test Principles and Practice of Accounting | Test: Treatment Of Goodwill In Partnership Accounts - 3


Description
This mock test of Test: Treatment Of Goodwill In Partnership Accounts - 3 for CA Foundation helps you for every CA Foundation entrance exam. This contains 28 Multiple Choice Questions for CA Foundation Test: Treatment Of Goodwill In Partnership Accounts - 3 (mcq) to study with solutions a complete question bank. The solved questions answers in this Test: Treatment Of Goodwill In Partnership Accounts - 3 quiz give you a good mix of easy questions and tough questions. CA Foundation students definitely take this Test: Treatment Of Goodwill In Partnership Accounts - 3 exercise for a better result in the exam. You can find other Test: Treatment Of Goodwill In Partnership Accounts - 3 extra questions, long questions & short questions for CA Foundation on EduRev as well by searching above.
QUESTION: 1

​The profits of last five years are Rs. 85,000; Rs. 90,000; Rs. 70,000; Rs. 1,00,000 and Rs. 80,000. Find the value of goodwill, if it is calculated on average profits of last five years on the basis of 3 years of purchase.

Solution:
QUESTION: 2

The profits of last three years are Rs. 42,000; Rs. 39,000 and Rs. 45,000. Find out the goodwill of two years purchase.

Solution:
QUESTION: 3

The capital of A and B sharing profits and losses equally are Rs. 90,000 and Rs. 30,000 respectively. They value the goodwill of the firm at Rs. 84,000, which was not recorded in the books. If goodwill is be raised now, by what amount each partner’s capital account will be debited:

Solution:
QUESTION: 4

​Find the goodwill of the firm using capitalization method from the following information: Total Capital Employed in the firm Rs. 8,00,000 Reasonable Rate of Return 15% Profits for the year Rs. 12,00,000

Solution:
QUESTION: 5

The capital of B and D are Rs. 90,000 and Rs. 30,000 respectively with the profit sharing ratio 3:1. The new ratio, admissible after 01.04.2006 is 5:3. Goodwill valued on 02.04.2006 as Rs. 84,000 will be credited to B and D’s capital by Rs………. and Rs. …………

Solution:
QUESTION: 6

The capital of B and D are Rs. 90,000 and Rs. 30,000 respectively with the profit sharing ratio 3:1. The new ratio, admissible after 01.04.2006 is 5:3. The goodwill is valued Rs. 80,000 as on that date. Amount payable by a gaining partner to a scarifying partner is:

Solution:
QUESTION: 7

A, B and C are equal partners. D is admitted to the firm for one-fourth 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

Solution:
QUESTION: 8

The profits for 1998-99 are Rs. 2,000; for 1999-2000 is Rs. 26,100 and for 2000-01 is Rs. 31,200. Closing stock for 1999-2000 and 2000-01 includes the defective items of Rs. 2,200 and Rs. 6,200 respectively which were considered as having market value NIL. Calculate goodwill on average profit method.

Solution:
QUESTION: 9

A and B are partners with capitals of Rs. 10,000 and Rs. 20,000 respectively and sharing profits equally. They admitted C as their third partner with one-fourth profits of the firm on the payment of Rs. 12,000. The amount of hidden goodwill is .

Solution:
QUESTION: 10

X and Y share profits and losses in the ratio of 2 : 1. They take Z as a partner and the new profit sharing ratio becomes 3 : 2 : 1.  Z brings Rs. 4,500 as premium for goodwill.The full value of goodwill will be

Solution:
QUESTION: 11

Under average profit basis goodwill is calculated by:

Solution:
QUESTION: 12

Under super profit basis goodwill is calculated by:

Solution:
QUESTION: 13

Under annuity basis goodwill is calculated by:

Solution:
QUESTION: 14

Under capitalisation basis goodwill is calculated by:

Solution:
QUESTION: 15

The following particulars are available in respect of the business carried on by a partnership firm:

Trading Results:

         2001 Loss Rs. 5,000

        2002 Loss Rs. 10,000

        2003 Profit Rs. 75,000

        2004 Profit Rs. 60,000

You are required to compute the value of goodwill on the basis of 5 year’s purchase of average profit of the business.

Solution:
QUESTION: 16

The profits and losses for the last years are 2001-02 Losses Rs. 10,000; 2002-03 Losses Rs. 2,500; 2003-04 Profits Rs. 98,000 & 2004-05 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 two years purchase of super profits based on the average of four years.

Solution:
QUESTION: 17

The profits for the last three years are 2002-03 Rs. 42,500; 2003-04 Profits Rs. 56,000 & 2004-05 Profits Rs. 68,000. The total assets of the firm are Rs. 11,52,500 and the total liabilities of the firm are Rs. 10,00,000 of which outsiders liabilities is Rs. 5,00,000.The rate of interest expected from capital invested is 10%. Calculate the value of goodwill on capitalization basis.

Solution:
QUESTION: 18

The profits and losses for the last years are 2001-02 Losses Rs. 10,000; 2002-03 Losses Rs. 2,500; 2003-04 Profits Rs. 98,000 & 2004-05 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%.

Solution:
QUESTION: 19

The profits and losses for the last years are 2001-02 Losses Rs. 10,000; 2002-03 Losses Rs. 2,500; 2003-04 Profits Rs. 98,000 & 2004-05 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%.

Solution:
QUESTION: 20

A, B and C are partners sharing profits and loss in the ratio 3:2:1. They decide to change their profit sharing ratio to 2:2:1. To give effect to this new profit sharing ratio they decide to value the goodwill at Rs. 30,000. Pass the necessary journal entry if Goodwill not appearing in the old balance sheet and should not appear in the new balance sheet.

Solution:
QUESTION: 21

​Goodwill brought in by incoming partner in cash for joining in a partnership firm is taken away by the old partners in their ……… ratio.

Solution:
QUESTION: 22

A & B are partners sharing profits and losses in the ratio 5:3. On admission C brings Rs. 70,000 cash and Rs. 48,000 against goodwill. New profit sharing ratio between A, B and C are 7:5:4. Find the sacrificing ratio as A:B

Solution:
QUESTION: 23

Goodwill bought in by incoming partner in cash for joining in a partnership firm is taken away by the old partners in:

Solution:
QUESTION: 24

A and B are partners with the capital Rs. 50,000 and Rs. 40,000 respectively. They share profits and losses equally. C is admitted on bringing Rs. 50,000 as capital only and nothing was bought against goodwill. Goodwill in Balance sheet of Rs. 20,000 is revalued as Rs. 35,000. What will be value of goodwill in the books after the admission of C?

Solution:
QUESTION: 25

Following are the factors affecting goodwill except:

Solution:
QUESTION: 26

Weighted average method of calculating goodwill should be followed when:

Solution:
QUESTION: 27

In the absence of any provision in the partnership agreement, profits and losses are shared

Solution:
QUESTION: 28

X, Y and Z are partners sharing profits and losses in the ratio 5:3:2 decide to share the future profits in the ratio 2:3:5. What will be the treatment for workmen compensation fund appearing in the balance sheet on the date if no information is available for the same?

Solution: