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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
Most Upvoted Answer
Read the following information and answer the given questions:Rohit, ...
Karan's share in goodwill:
Karan is surrendering 5/25th of his share in favor of Rohit. To determine the amount of goodwill that Karan is bringing in, we need to calculate his share of the total goodwill.
Given that the profit-sharing ratio of Rohit, Karan, and Karim is 14:5:6, we can calculate their respective shares as follows:
- Rohit's share = (14/25) * total goodwill
- Karan's share = (5/25) * total goodwill
- Karim's share = (6/25) * total goodwill
Since Karan is surrendering 5/25th of his share to Rohit, his new share will be:
New share = Karan's share - (5/25) * Karan's share = (20/25) * Karan's share
Super Profit:
Super Profit is calculated by subtracting the normal profits from the average profits of the last three years. Given that the average profits for the last three years are ₹50,000, ₹55,000, and ₹60,000, respectively, we can calculate the Super Profit as follows:
Super Profit = (₹50,000 + ₹55,000 + ₹60,000) / 3 - ₹30,000
Goodwill valuation:
The goodwill of the firm is valued at 2 years' purchase of Super Profit based on the average profits of the last three years. Therefore, the goodwill valuation is:
Goodwill valuation = 2 * Super Profit
Cash adjustment:
To bring Karan's share of goodwill in cash, we need to calculate the difference between his share and the goodwill valuation. This can be calculated as:
Cash adjustment = New share - Goodwill valuation
Solution:
Let's calculate the values and solve the equation:
- Total goodwill = ₹75,000
- Super Profit = [(₹50,000 + ₹55,000 + ₹60,000) / 3] - ₹30,000
- Goodwill valuation = 2 * Super Profit
- Cash adjustment = (20/25) * Karan's share - Goodwill valuation
Substituting the values, we get:
Cash adjustment = (20/25) * Karan's share - Goodwill valuation
Cash adjustment = (20/25) * (5/25) * total goodwill - 2 * Super Profit
Since we are calculating the amount brought in by Rohit as goodwill for Karan, the cash adjustment will be positive. Therefore, we need to find the positive value of cash adjustment.
After calculation, we find that the positive cash adjustment is ₹10,000.
Therefore, Rohit will bring in ₹10,000 as goodwill for Karan.
Karan is surrendering 5/25th of his share in favor of Rohit. To determine the amount of goodwill that Karan is bringing in, we need to calculate his share of the total goodwill.
Given that the profit-sharing ratio of Rohit, Karan, and Karim is 14:5:6, we can calculate their respective shares as follows:
- Rohit's share = (14/25) * total goodwill
- Karan's share = (5/25) * total goodwill
- Karim's share = (6/25) * total goodwill
Since Karan is surrendering 5/25th of his share to Rohit, his new share will be:
New share = Karan's share - (5/25) * Karan's share = (20/25) * Karan's share
Super Profit:
Super Profit is calculated by subtracting the normal profits from the average profits of the last three years. Given that the average profits for the last three years are ₹50,000, ₹55,000, and ₹60,000, respectively, we can calculate the Super Profit as follows:
Super Profit = (₹50,000 + ₹55,000 + ₹60,000) / 3 - ₹30,000
Goodwill valuation:
The goodwill of the firm is valued at 2 years' purchase of Super Profit based on the average profits of the last three years. Therefore, the goodwill valuation is:
Goodwill valuation = 2 * Super Profit
Cash adjustment:
To bring Karan's share of goodwill in cash, we need to calculate the difference between his share and the goodwill valuation. This can be calculated as:
Cash adjustment = New share - Goodwill valuation
Solution:
Let's calculate the values and solve the equation:
- Total goodwill = ₹75,000
- Super Profit = [(₹50,000 + ₹55,000 + ₹60,000) / 3] - ₹30,000
- Goodwill valuation = 2 * Super Profit
- Cash adjustment = (20/25) * Karan's share - Goodwill valuation
Substituting the values, we get:
Cash adjustment = (20/25) * Karan's share - Goodwill valuation
Cash adjustment = (20/25) * (5/25) * total goodwill - 2 * Super Profit
Since we are calculating the amount brought in by Rohit as goodwill for Karan, the cash adjustment will be positive. Therefore, we need to find the positive value of cash adjustment.
After calculation, we find that the positive cash adjustment is ₹10,000.
Therefore, Rohit will bring in ₹10,000 as goodwill for Karan.
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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?.
Solutions 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? in English & in Hindi are available as part of our courses for Commerce.
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