CA Foundation Exam > CA Foundation Questions > The profits for 1998-99 fare Rs. 2,000 for 19...
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The profits for 1998-99 fare Rs. 2,000 for 1999-2000 is Rs. 26,100 and for 2000-01 is R.s 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 simple average profit method.
- a)Rs. 23,700
- b)Rs. 17,700
- c)Rs. 13,700
- d)Rs. 17,300
Correct answer is option 'B'. Can you explain this answer?
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The profits for 1998-99 fare Rs. 2,000 for 1999-2000 is Rs. 26,100 and...
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The profits for 1998-99 fare Rs. 2,000 for 1999-2000 is Rs. 26,100 and...
Given information:
- Profits for 1998-99 = Rs. 2,000
- Profit for 1999-2000 = Rs. 26,100 (includes defective items worth Rs. 2,200)
- Profit for 2000-01 = Rs. 31,200 (includes defective items worth Rs. 6,200)
To calculate goodwill using the simple average profit method, we need to first calculate the average profit for the three years.
Average profit = (Profit for 1998-99 + Profit for 1999-2000 + Profit for 2000-01) / 3
= (2,000 + 26,100 + 31,200) / 3
= Rs. 19,100
Next, we need to adjust the average profit for any abnormal items like the defective stock.
Adjusted average profit = Average profit - Abnormal items
= Rs. 19,100 - (2,200 + 6,200)
= Rs. 10,700
Finally, we can calculate the goodwill as follows:
Goodwill = (Average maintainable profit - Adjusted average profit) x Number of years' purchase
= (Profit for 2000-01 - Abnormal items - Adjusted average profit) x 100 / Normal rate of return
= (31,200 - 6,200 - 10,700) x 100 / 10%
= Rs. 17,700
Therefore, option B is the correct answer.
- Profits for 1998-99 = Rs. 2,000
- Profit for 1999-2000 = Rs. 26,100 (includes defective items worth Rs. 2,200)
- Profit for 2000-01 = Rs. 31,200 (includes defective items worth Rs. 6,200)
To calculate goodwill using the simple average profit method, we need to first calculate the average profit for the three years.
Average profit = (Profit for 1998-99 + Profit for 1999-2000 + Profit for 2000-01) / 3
= (2,000 + 26,100 + 31,200) / 3
= Rs. 19,100
Next, we need to adjust the average profit for any abnormal items like the defective stock.
Adjusted average profit = Average profit - Abnormal items
= Rs. 19,100 - (2,200 + 6,200)
= Rs. 10,700
Finally, we can calculate the goodwill as follows:
Goodwill = (Average maintainable profit - Adjusted average profit) x Number of years' purchase
= (Profit for 2000-01 - Abnormal items - Adjusted average profit) x 100 / Normal rate of return
= (31,200 - 6,200 - 10,700) x 100 / 10%
= Rs. 17,700
Therefore, option B is the correct answer.
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The profits for 1998-99 fare Rs. 2,000 for 1999-2000 is Rs. 26,100 and for 2000-01 is R.s 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 simple average profit method.a)Rs. 23,700b)Rs. 17,700c)Rs. 13,700d)Rs. 17,300Correct answer is option 'B'. Can you explain this answer?
Question Description
The profits for 1998-99 fare Rs. 2,000 for 1999-2000 is Rs. 26,100 and for 2000-01 is R.s 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 simple average profit method.a)Rs. 23,700b)Rs. 17,700c)Rs. 13,700d)Rs. 17,300Correct answer is option 'B'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The profits for 1998-99 fare Rs. 2,000 for 1999-2000 is Rs. 26,100 and for 2000-01 is R.s 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 simple average profit method.a)Rs. 23,700b)Rs. 17,700c)Rs. 13,700d)Rs. 17,300Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The profits for 1998-99 fare Rs. 2,000 for 1999-2000 is Rs. 26,100 and for 2000-01 is R.s 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 simple average profit method.a)Rs. 23,700b)Rs. 17,700c)Rs. 13,700d)Rs. 17,300Correct answer is option 'B'. Can you explain this answer?.
The profits for 1998-99 fare Rs. 2,000 for 1999-2000 is Rs. 26,100 and for 2000-01 is R.s 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 simple average profit method.a)Rs. 23,700b)Rs. 17,700c)Rs. 13,700d)Rs. 17,300Correct answer is option 'B'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The profits for 1998-99 fare Rs. 2,000 for 1999-2000 is Rs. 26,100 and for 2000-01 is R.s 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 simple average profit method.a)Rs. 23,700b)Rs. 17,700c)Rs. 13,700d)Rs. 17,300Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The profits for 1998-99 fare Rs. 2,000 for 1999-2000 is Rs. 26,100 and for 2000-01 is R.s 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 simple average profit method.a)Rs. 23,700b)Rs. 17,700c)Rs. 13,700d)Rs. 17,300Correct answer is option 'B'. Can you explain this answer?.
Solutions for The profits for 1998-99 fare Rs. 2,000 for 1999-2000 is Rs. 26,100 and for 2000-01 is R.s 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 simple average profit method.a)Rs. 23,700b)Rs. 17,700c)Rs. 13,700d)Rs. 17,300Correct 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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ample number of questions to practice The profits for 1998-99 fare Rs. 2,000 for 1999-2000 is Rs. 26,100 and for 2000-01 is R.s 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 simple average profit method.a)Rs. 23,700b)Rs. 17,700c)Rs. 13,700d)Rs. 17,300Correct answer is option 'B'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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