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Read the following information and answer the given questions:
Rohit, Karan and Karim are partners sharing profits and losses in the ratio of 14 : 5 : 6 respectively. Karan retires and surrenders 5/25th share in favour of Rohit. The goodwill of the firm is valued at 2 years’ purchase of Super Profit based on average profits of the last three years. The profits for the last three years are ₹50,000, ₹55,000 and ₹60,000, respectively. The normal profits for the similar firm are ₹30,000. Goodwill already appears in the books of the firm at ₹75,000.
Q. What amount will be brought in by Rohit as goodwill for Karan?
- a)₹50,000
- b)₹10,000
- c)₹30,000
- d)₹75,000
Correct answer is option 'B'. Can you explain this answer?
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Read the following information and answer the given questions:Rohit, ...
The goodwill is to be brought in by Rohit himself as he is the only gaining partner.
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Karan's share of Goodwill = ₹50,000 x 5/25 = ₹10,000
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Read the following information and answer the given questions:Rohit, ...
Calculation of Goodwill
The goodwill of the firm is valued at 2 years' purchase of Super Profit based on average profits of the last three years. To calculate the super profit, we need to find the excess of actual profits over normal profits.
Normal profits = ₹30,000
Actual profits for the last three years = ₹50,000, ₹55,000, ₹60,000
Step 1: Calculation of Super Profit
Super Profit = Actual Profit - Normal Profit
Super Profit for the first year = ₹50,000 - ₹30,000 = ₹20,000
Super Profit for the second year = ₹55,000 - ₹30,000 = ₹25,000
Super Profit for the third year = ₹60,000 - ₹30,000 = ₹30,000
Step 2: Calculation of Average Super Profit
Average Super Profit = (Super Profit for the first year + Super Profit for the second year + Super Profit for the third year) / 3
Average Super Profit = (₹20,000 + ₹25,000 + ₹30,000) / 3 = ₹25,000
Step 3: Calculation of Goodwill
Goodwill = 2 years' purchase of Average Super Profit
Goodwill = 2 x ₹25,000 = ₹50,000
Calculation of Karan's Share in Goodwill
Karan is surrendering 5/25th share in favor of Rohit. Since the ratio of profits and losses among the partners is 14:5:6, the share of Karan is 5/(5+14+6) = 5/25
Step 4: Calculation of Karan's Share in Goodwill
Karan's Share in Goodwill = Karan's Share x Goodwill
Karan's Share in Goodwill = (5/25) x ₹50,000 = ₹10,000
Therefore, the amount brought in by Rohit as goodwill for Karan is ₹10,000.
The goodwill of the firm is valued at 2 years' purchase of Super Profit based on average profits of the last three years. To calculate the super profit, we need to find the excess of actual profits over normal profits.
Normal profits = ₹30,000
Actual profits for the last three years = ₹50,000, ₹55,000, ₹60,000
Step 1: Calculation of Super Profit
Super Profit = Actual Profit - Normal Profit
Super Profit for the first year = ₹50,000 - ₹30,000 = ₹20,000
Super Profit for the second year = ₹55,000 - ₹30,000 = ₹25,000
Super Profit for the third year = ₹60,000 - ₹30,000 = ₹30,000
Step 2: Calculation of Average Super Profit
Average Super Profit = (Super Profit for the first year + Super Profit for the second year + Super Profit for the third year) / 3
Average Super Profit = (₹20,000 + ₹25,000 + ₹30,000) / 3 = ₹25,000
Step 3: Calculation of Goodwill
Goodwill = 2 years' purchase of Average Super Profit
Goodwill = 2 x ₹25,000 = ₹50,000
Calculation of Karan's Share in Goodwill
Karan is surrendering 5/25th share in favor of Rohit. Since the ratio of profits and losses among the partners is 14:5:6, the share of Karan is 5/(5+14+6) = 5/25
Step 4: Calculation of Karan's Share in Goodwill
Karan's Share in Goodwill = Karan's Share x Goodwill
Karan's Share in Goodwill = (5/25) x ₹50,000 = ₹10,000
Therefore, the amount brought in by Rohit as goodwill for Karan is ₹10,000.
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Read the following information and answer the given questions:Rohit, Karan and Karim are partners sharing profits and losses in the ratio of 14 : 5 : 6 respectively. Karan retires and surrenders 5/25th share in favour of Rohit. The goodwill of the firm is valued at 2 years’ purchase of Super Profit based on average profits of the last three years. The profits for the last three years are ₹50,000, ₹55,000 and ₹60,000, respectively. The normal profits for the similar firm are ₹30,000. Goodwill already appears in the books of the firm at ₹75,000.Q. What amount will be brought in by Rohit as goodwill for Karan?a)₹50,000b)₹10,000c)₹30,000d)₹75,000Correct answer is option 'B'. Can you explain this answer?
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Read the following information and answer the given questions:Rohit, Karan and Karim are partners sharing profits and losses in the ratio of 14 : 5 : 6 respectively. Karan retires and surrenders 5/25th share in favour of Rohit. The goodwill of the firm is valued at 2 years’ purchase of Super Profit based on average profits of the last three years. The profits for the last three years are ₹50,000, ₹55,000 and ₹60,000, respectively. The normal profits for the similar firm are ₹30,000. Goodwill already appears in the books of the firm at ₹75,000.Q. What amount will be brought in by Rohit as goodwill for Karan?a)₹50,000b)₹10,000c)₹30,000d)₹75,000Correct answer is option 'B'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Read the following information and answer the given questions:Rohit, Karan and Karim are partners sharing profits and losses in the ratio of 14 : 5 : 6 respectively. Karan retires and surrenders 5/25th share in favour of Rohit. The goodwill of the firm is valued at 2 years’ purchase of Super Profit based on average profits of the last three years. The profits for the last three years are ₹50,000, ₹55,000 and ₹60,000, respectively. The normal profits for the similar firm are ₹30,000. Goodwill already appears in the books of the firm at ₹75,000.Q. What amount will be brought in by Rohit as goodwill for Karan?a)₹50,000b)₹10,000c)₹30,000d)₹75,000Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Read the following information and answer the given questions:Rohit, Karan and Karim are partners sharing profits and losses in the ratio of 14 : 5 : 6 respectively. Karan retires and surrenders 5/25th share in favour of Rohit. The goodwill of the firm is valued at 2 years’ purchase of Super Profit based on average profits of the last three years. The profits for the last three years are ₹50,000, ₹55,000 and ₹60,000, respectively. The normal profits for the similar firm are ₹30,000. Goodwill already appears in the books of the firm at ₹75,000.Q. What amount will be brought in by Rohit as goodwill for Karan?a)₹50,000b)₹10,000c)₹30,000d)₹75,000Correct answer is option 'B'. Can you explain this answer?.
Read the following information and answer the given questions:Rohit, Karan and Karim are partners sharing profits and losses in the ratio of 14 : 5 : 6 respectively. Karan retires and surrenders 5/25th share in favour of Rohit. The goodwill of the firm is valued at 2 years’ purchase of Super Profit based on average profits of the last three years. The profits for the last three years are ₹50,000, ₹55,000 and ₹60,000, respectively. The normal profits for the similar firm are ₹30,000. Goodwill already appears in the books of the firm at ₹75,000.Q. What amount will be brought in by Rohit as goodwill for Karan?a)₹50,000b)₹10,000c)₹30,000d)₹75,000Correct answer is option 'B'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Read the following information and answer the given questions:Rohit, Karan and Karim are partners sharing profits and losses in the ratio of 14 : 5 : 6 respectively. Karan retires and surrenders 5/25th share in favour of Rohit. The goodwill of the firm is valued at 2 years’ purchase of Super Profit based on average profits of the last three years. The profits for the last three years are ₹50,000, ₹55,000 and ₹60,000, respectively. The normal profits for the similar firm are ₹30,000. Goodwill already appears in the books of the firm at ₹75,000.Q. What amount will be brought in by Rohit as goodwill for Karan?a)₹50,000b)₹10,000c)₹30,000d)₹75,000Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Read the following information and answer the given questions:Rohit, Karan and Karim are partners sharing profits and losses in the ratio of 14 : 5 : 6 respectively. Karan retires and surrenders 5/25th share in favour of Rohit. The goodwill of the firm is valued at 2 years’ purchase of Super Profit based on average profits of the last three years. The profits for the last three years are ₹50,000, ₹55,000 and ₹60,000, respectively. The normal profits for the similar firm are ₹30,000. Goodwill already appears in the books of the firm at ₹75,000.Q. What amount will be brought in by Rohit as goodwill for Karan?a)₹50,000b)₹10,000c)₹30,000d)₹75,000Correct answer is option 'B'. Can you explain this answer?.
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