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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.
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.
- a)Rs. 1,25,000
- b)Rs. 1,50,000
- c)Rs. 10,000
- d)Rs. 1,20,000
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
The following particulars are available in respect of the business car...
Average of profits, assuming that the normal rate of return on investment is 10%.
First, we need to calculate the total profits for the past 5 years:
Total profits = 0 + 0 + 75,000 + 60,000 = Rs. 1,35,000
Next, we need to calculate the average annual profit:
Average annual profit = Total profits / 5 = Rs. 27,000
We then need to calculate the capital required to generate this average annual profit:
Capital required = Average annual profit / Normal rate of return = Rs. 2,70,000
Assuming that the partners share the profits and losses equally, the share of each partner's capital in the partnership will be:
Partner's capital share = Capital required / 2 = Rs. 1,35,000
The value of goodwill will then be the excess of the total capital employed over the sum of the partners' capital shares:
Goodwill = Total capital employed - (Partner A's capital share + Partner B's capital share)
Assuming there are two partners in the firm, this will be:
Goodwill = Total capital employed - (Rs. 1,35,000 + Rs. 1,35,000) = Total capital employed - Rs. 2,70,000
We do not have information about the total capital employed, so we cannot calculate the value of goodwill.
First, we need to calculate the total profits for the past 5 years:
Total profits = 0 + 0 + 75,000 + 60,000 = Rs. 1,35,000
Next, we need to calculate the average annual profit:
Average annual profit = Total profits / 5 = Rs. 27,000
We then need to calculate the capital required to generate this average annual profit:
Capital required = Average annual profit / Normal rate of return = Rs. 2,70,000
Assuming that the partners share the profits and losses equally, the share of each partner's capital in the partnership will be:
Partner's capital share = Capital required / 2 = Rs. 1,35,000
The value of goodwill will then be the excess of the total capital employed over the sum of the partners' capital shares:
Goodwill = Total capital employed - (Partner A's capital share + Partner B's capital share)
Assuming there are two partners in the firm, this will be:
Goodwill = Total capital employed - (Rs. 1,35,000 + Rs. 1,35,000) = Total capital employed - Rs. 2,70,000
We do not have information about the total capital employed, so we cannot calculate the value of goodwill.
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The following particulars are available in respect of the business car...
Correct answer is option B
Lets add all the amounts of the years
Avg.profit=-5000-10000+60000+75000=120000/4=30000
now , goodwill= avg.profit * purchase years ,
goodwill = 30000*5=150000
goodwill = 150000
Lets add all the amounts of the years
Avg.profit=-5000-10000+60000+75000=120000/4=30000
now , goodwill= avg.profit * purchase years ,
goodwill = 30000*5=150000
goodwill = 150000
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The following particulars are available in respect of the business carried on by a partnership firm:Trading Results:2001 Loss Rs. 5,0002002 Loss Rs. 10,0002003 Profit Rs. 75,0002004 Profit Rs. 60,000You are required to compute the value of goodwill on the basis of 5 year’s purchase of average profit of the business.a)Rs. 1,25,000b)Rs. 1,50,000c)Rs. 10,000d)Rs. 1,20,000Correct answer is option 'B'. Can you explain this answer?
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The following particulars are available in respect of the business carried on by a partnership firm:Trading Results:2001 Loss Rs. 5,0002002 Loss Rs. 10,0002003 Profit Rs. 75,0002004 Profit Rs. 60,000You are required to compute the value of goodwill on the basis of 5 year’s purchase of average profit of the business.a)Rs. 1,25,000b)Rs. 1,50,000c)Rs. 10,000d)Rs. 1,20,000Correct answer is option 'B'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The following particulars are available in respect of the business carried on by a partnership firm:Trading Results:2001 Loss Rs. 5,0002002 Loss Rs. 10,0002003 Profit Rs. 75,0002004 Profit Rs. 60,000You are required to compute the value of goodwill on the basis of 5 year’s purchase of average profit of the business.a)Rs. 1,25,000b)Rs. 1,50,000c)Rs. 10,000d)Rs. 1,20,000Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The following particulars are available in respect of the business carried on by a partnership firm:Trading Results:2001 Loss Rs. 5,0002002 Loss Rs. 10,0002003 Profit Rs. 75,0002004 Profit Rs. 60,000You are required to compute the value of goodwill on the basis of 5 year’s purchase of average profit of the business.a)Rs. 1,25,000b)Rs. 1,50,000c)Rs. 10,000d)Rs. 1,20,000Correct answer is option 'B'. Can you explain this answer?.
The following particulars are available in respect of the business carried on by a partnership firm:Trading Results:2001 Loss Rs. 5,0002002 Loss Rs. 10,0002003 Profit Rs. 75,0002004 Profit Rs. 60,000You are required to compute the value of goodwill on the basis of 5 year’s purchase of average profit of the business.a)Rs. 1,25,000b)Rs. 1,50,000c)Rs. 10,000d)Rs. 1,20,000Correct answer is option 'B'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The following particulars are available in respect of the business carried on by a partnership firm:Trading Results:2001 Loss Rs. 5,0002002 Loss Rs. 10,0002003 Profit Rs. 75,0002004 Profit Rs. 60,000You are required to compute the value of goodwill on the basis of 5 year’s purchase of average profit of the business.a)Rs. 1,25,000b)Rs. 1,50,000c)Rs. 10,000d)Rs. 1,20,000Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The following particulars are available in respect of the business carried on by a partnership firm:Trading Results:2001 Loss Rs. 5,0002002 Loss Rs. 10,0002003 Profit Rs. 75,0002004 Profit Rs. 60,000You are required to compute the value of goodwill on the basis of 5 year’s purchase of average profit of the business.a)Rs. 1,25,000b)Rs. 1,50,000c)Rs. 10,000d)Rs. 1,20,000Correct answer is option 'B'. Can you explain this answer?.
Solutions for The following particulars are available in respect of the business carried on by a partnership firm:Trading Results:2001 Loss Rs. 5,0002002 Loss Rs. 10,0002003 Profit Rs. 75,0002004 Profit Rs. 60,000You are required to compute the value of goodwill on the basis of 5 year’s purchase of average profit of the business.a)Rs. 1,25,000b)Rs. 1,50,000c)Rs. 10,000d)Rs. 1,20,000Correct answer is option 'B'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
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The following particulars are available in respect of the business carried on by a partnership firm:Trading Results:2001 Loss Rs. 5,0002002 Loss Rs. 10,0002003 Profit Rs. 75,0002004 Profit Rs. 60,000You are required to compute the value of goodwill on the basis of 5 year’s purchase of average profit of the business.a)Rs. 1,25,000b)Rs. 1,50,000c)Rs. 10,000d)Rs. 1,20,000Correct answer is option 'B'. Can you explain this answer?, a detailed solution for The following particulars are available in respect of the business carried on by a partnership firm:Trading Results:2001 Loss Rs. 5,0002002 Loss Rs. 10,0002003 Profit Rs. 75,0002004 Profit Rs. 60,000You are required to compute the value of goodwill on the basis of 5 year’s purchase of average profit of the business.a)Rs. 1,25,000b)Rs. 1,50,000c)Rs. 10,000d)Rs. 1,20,000Correct answer is option 'B'. Can you explain this answer? has been provided alongside types of The following particulars are available in respect of the business carried on by a partnership firm:Trading Results:2001 Loss Rs. 5,0002002 Loss Rs. 10,0002003 Profit Rs. 75,0002004 Profit Rs. 60,000You are required to compute the value of goodwill on the basis of 5 year’s purchase of average profit of the business.a)Rs. 1,25,000b)Rs. 1,50,000c)Rs. 10,000d)Rs. 1,20,000Correct answer is option 'B'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice The following particulars are available in respect of the business carried on by a partnership firm:Trading Results:2001 Loss Rs. 5,0002002 Loss Rs. 10,0002003 Profit Rs. 75,0002004 Profit Rs. 60,000You are required to compute the value of goodwill on the basis of 5 year’s purchase of average profit of the business.a)Rs. 1,25,000b)Rs. 1,50,000c)Rs. 10,000d)Rs. 1,20,000Correct answer is option 'B'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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