{"id":11407,"date":"2021-04-03T15:00:49","date_gmt":"2021-04-03T09:30:49","guid":{"rendered":"https:\/\/wordpress-505192-1602719.cloudwaysapps.com\/?p=11407"},"modified":"2021-04-03T16:33:26","modified_gmt":"2021-04-03T11:03:26","slug":"samacheer-kalvi-12th-accountancy-solutions-chapter-4","status":"publish","type":"post","link":"https:\/\/samacheerkalviguru.com\/samacheer-kalvi-12th-accountancy-solutions-chapter-4\/","title":{"rendered":"Samacheer Kalvi 12th Accountancy Solutions Chapter 4 Goodwill in Partnership Accounts"},"content":{"rendered":"

Students can Download Accountancy Chapter 4 Goodwill in Partnership Accounts Questions and Answers, Notes Pdf, Samacheer Kalvi 12th Accountancy Book Solutions<\/a> Guide Pdf helps you to revise the complete Tamilnadu State Board New Syllabus and score more marks in your examinations.<\/p>\n

Tamilnadu Samacheer Kalvi 12th Accountancy Solutions Chapter 4 Goodwill in Partnership Accounts<\/h2>\n

Samacheer Kalvi 12th Accountancy Goodwill in Partnership Accounts Text Book Back Questions and Answers<\/h3>\n

I. Choose the Correct Answer<\/p>\n

12th Accountancy 4th Chapter Solutions Question 1.<\/strong>
\nWhich of the following statements is true?
\n(a) Goodwill is an intangible asset
\n(b) Goodwill is a current asset
\n(c) Goodwill is a fictitious asset
\n(d) Goodwill
\nAnswer:
\n(a) Goodwill is an intangible asset<\/p>\n

12th Accountancy Chapter 4 Question 2.<\/strong>
\nSuper profit is the difference between ………………..
\n(a) Capital employed and average profit
\n(b) Assets and liabilities
\n(c) Average profit and normal profit
\n(d) Current year\u2019s profit and average profit
\nAnswer:
\n(c) Average profit and normal profit<\/p>\n

12th Accountancy 4th Chapter Question 3.<\/strong>
\nThe average rate of return of similar concerns is considered as ………………..
\n(a) Average profit
\n(b) Normal rate of return
\n(c) Expected rate of return
\n(d) None of these
\nAnswer:
\n(b) Normal rate of return<\/p>\n

Class 12 Accountancy Chapter 4 Solutions Question 4.<\/strong>
\nWhich of the following is true?
\n(a) Super profit = Total profit \/ number of years
\n(b) Super profit = Weighted profit \/ number of years
\n(c) Super profit = Average profit – Normal profit
\n(d) Super profit = Average profit x Years of purchase
\nAnswer:
\n(c) Super profit = Average profit – Normal profit<\/p>\n

Chapter 4 Accountancy Class 12 Solutions Question 5.<\/strong>
\nIdentify the incorrect pair ………………..
\n(a) Goodwill under Average profit method – Average profit x Number of years of purchase
\n(b) Goodwill under Super profit method – Super profit x Number of years of purchase
\n(c) Goodwill under Annuity method – Average profit x Present value of annuity factor
\n(d) Goodwill under Weighted average profit method – Weighted average profit x Number of years of purchase
\nAnswer:
\n(c) Goodwill under Annuity method – Average profit x Present value of annuity factor<\/p>\n

Class 12th Accounts Chapter 4 Solutions Question 6.<\/strong>
\nWhen the average profit is \u20b9 25,000 and the normal profit is \u20b9 15,000, super profit is ………………..
\n(a) \u20b9 25,000
\n(b) \u20b9 5,000
\n(c) \u20b9 10,000
\n(d) \u20b9 15,000
\nAnswer:
\n(c) \u20b9 10,000<\/p>\n

Accountancy Class 12 Chapter 4 Solutions Question 7.<\/strong>
\nBook profit of 2017 is \u20b9 35,000; non – recurring income included in the profit is \u20b9 1,000 and abnormal loss charged in the year 2017 was \u20b9 2,000, then the adjusted profit is ………………..
\n(a) \u20b9 36,000
\n(b) \u20b9 35,000
\n(c) \u20b9 38,000
\n(d) \u20b9 34,000
\nAnswer:
\n(a) \u20b9 36,000<\/p>\n

Accountancy 4th Chapter Question 8.<\/strong>
\nThe total capitalised value of a business is \u20b9 1,00,000; assets are \u20b9 1,50,000 and liabilities are \u20b9 80,000. The value of goodwill as per the capitalisation method will be ………………..
\n(a) \u20b9 40,000
\n(b) \u20b9 70,000
\n(c) \u20b9 1,00,000
\n(d) \u20b9 30,000
\nAnswer:
\n(d) \u20b9 30,000<\/p>\n

II. Very Short Answer Questions<\/p>\n

Accountancy Chapter 4 Class 12 Question 1.<\/strong>
\nWhat is goodwill?
\nAnswer:
\nGoodwill is the good name or reputation of the business which brings benefit to the business. It enables the business to earn more profit. It is the present value of a firm\u2019s future excess earnings.<\/p>\n

Accountancy Chapter 4 Question 2.<\/strong>
\nWhat is acquired goodwill?
\nAnswer:
\nGoodwill acquired by making payment in cash or kind is called acquired or purchased goodwill. When a firm purchases an existing business, the price paid for purchase of such business may exceed the net assets (Assets – Liabilities) of the business acquired.<\/p>\n

Chapter 4 Accounts Class 12 Question 3.<\/strong>
\nWhat is super profit?
\nAnswer:
\nSuper profit is the excess of average profit over the normal profit of a business.
\nSuper profit = Average profit – Normal profit.
\nAverage profit is calculated by dividing the total of adjusted actual profit of certain number of years by the total number of such years. Normal profit is the profit earned by the similar business firms under normal conditions.
\nNormal profit = Capital employed x Normal rate of return Capital employed = Fixed assets + Current assets – Current liabilities<\/p>\n

Samacheer Kalvi Guru 12th Accountancy Question 4.<\/strong>
\nWhat is normal rate of return?
\nAnswer:
\nIt is the rate at which profit is earned by similar business entities in the industry under normal circumstances.<\/p>\n

Question 5.
\nState any two circumstances under which goodwill of a partnership firm is valued?
\nAnswer:<\/p>\n

    \n
  1. When there is a change in the profit sharing ratio.<\/li>\n
  2. When a new partner is admitted into a firm.<\/li>\n
  3. When an existing partner retires from the firm or when a partner dies.<\/li>\n
  4. When a partnership firm is dissolved.<\/li>\n<\/ol>\n

    III. Short Answer Questions<\/p>\n

    Question 1.
    \nState any six factors determining goodwill.
    \nAnswer:<\/p>\n

      \n
    1. Profitability of the firm.<\/li>\n
    2. Favourable location of the business enterprise.<\/li>\n
    3. Good quality of goods or services offered.<\/li>\n
    4. Tenure of the business enterprise.<\/li>\n
    5. Efficiency of management.<\/li>\n
    6. Degree of competition.<\/li>\n
    7. Other factors.<\/li>\n<\/ol>\n

      Question 2.
      \nHow is goodwill calculated under the super profits method?
      \nAnswer:
      \n1. Purchase of super profit method: Goodwill is calculated by multiplying the super profit by a certain number of years of purchase.
      \nGoodwill = super profit x No. of years of purchase<\/p>\n

      2. Annuity method: Value of goodwill is calculated by multiplying the super profit with the present value of annuity.
      \nGoodwill = Super profit x Present value annuity factor<\/p>\n

      3. Capitalisation of super profit method: Goodwill = \"12th x 100<\/p>\n

      Question 3.
      \nHow is the value of goodwill calculated under the capitalisation method?
      \nAnswer:
      \nCapitalisation method:
      \nUnder Capitalisation method, goodwill is the excess of capitalised value of average profit of the business over the actual capital employed in the business.
      \nGoodwill = Total capitalised value of the business – Actual capital employed
      \nThe total capitalised value of the business is calculated by capitalising the average profits on the basis of the normal rate of return.
      \nCapitalised value of the business =\"12th x 100
      \nActual capital employed = Fixed assets (excluding goodwill) + Current assets – Current liabilities<\/p>\n

      Question 4.
      \nCompute average profit from the following information.
      \nAnswer:
      \nCalculation of Average profit:
      \n2016 – \u20b9 8,000; 2017 – \u20b9 10,000; 2018 – \u20b9 9,000
      \n\"12th
      \nValuation of goodwill = \u20b9 9,000<\/p>\n

      Question 5.
      \nCalculate the value of goodwill at 2 years purchase of average profit when average profit is \u20b9 15,000.
      \nAnswer:
      \nGoodwill: \u20b9 30,000<\/p>\n

      IV. Exercises<\/p>\n

      Simple average profit method:
      \nQuestion 1.
      \nThe following are the profits of a firm in the last five years:
      \n\"Class
      \nAnswer:
      \n\"Chapter
      \nValuation of goodwill = Average profit x No. of years purchase
      \n= \u20b9 12,000 x 2 years
      \n= \u20b9 24,000<\/p>\n

      Question 2.
      \nFrom the following information, calculate the value of goodwill on the basis of 3 years purchase of average profits of last four years.
      \n\"Class
      \nAnswer:
      \nCalculation of goodwill:
      \n\"Accountancy
      \nValuation of goodwill = Average profit x No. of years purchase = \u20b9 4,000 x 3
      \n= \u20b9 12,000<\/p>\n

      Question 3.
      \nFrom the following information relating to a partnership firm, find out the value of its goodwill based on 3 years purchase of average profits of the last 4 years:<\/p>\n

        \n
      1. Profits of the years 2015, 2016, 2017 and 2018 are \u20b9 10, 000, \u20b9 12, 500, \u20b9 12, 000 and \u20b9 11, 500, respectively.<\/li>\n
      2. The business was looked after by a partner and his fair remuneration amounts to \u20b9 1, 500 per year. This amount was not considered in the calculation of the above profits.<\/li>\n<\/ol>\n

        Answer:
        \nValuation of goodwill
        \nCalculation of average profit Year Profit
        \n\"Accountancy
        \n(-) Remuneration = \u20b9 1,500
        \nNet average profit = \u20b9 10,000
        \nValuation of goodwill = Average profit x No. of years purchase
        \n= \u20b9 10,000 x 3
        \n= \u20b9 30,000<\/p>\n

        Question 4.
        \nFrom the following information relating to Sridevi enterprises, calculate the value of goodwill on the basis of 4 years purchase of the average profits of 3 years.<\/p>\n

          \n
        1. Profits for the years ending 31st<\/sup> December 2016, 2017 and 2018 were \u20b9 1,75,000, \u20b9 1,50,000 and \u20b9 2,00,000, respectively.<\/li>\n
        2. A non – recurring income of \u20b9 45,000 is included in the profits of the year 2016.<\/li>\n
        3. The closing stock of the year 2017 was overvalued by \u20b9 30,000.<\/li>\n<\/ol>\n

          Answer:
          \nCalculation of adjusted profit
          \n\"Accountancy
          \nAverage profit = <\"Accountancy
          \nAverage profit = \\(\\frac { 4, 80, 000 }{ 3 }\\) = \u20b9 1,60,000
          \nGoodwill = Average profit x No. of year purchase = \u20b9 1,60,000 x 4
          \n= \u20b9 64,00,000<\/p>\n

          Question 5.
          \nThe following particulars are available in respect of the business carried on by a partnership firm:<\/p>\n

            \n
          1. Profits earned: 2016: \u20b9 25,000; 2017: \u20b9 23,000 and 2018: \u20b9 26,000.<\/li>\n
          2. Profit of 2016 includes a non – recurring income of \u20b9 2,500.<\/li>\n
          3. Profit of 2017 is reduced by \u20b9 3,500 due to stock destroyed by fire.<\/li>\n
          4. The stock was not insured. But, it is decided to insure the stock in future. The insurance premium is estimated to be \u20b9 250 per annum.<\/li>\n<\/ol>\n

            You are required to calculate the value of goodwill of the firm on the basis of 2 years purchase of average profits of the last three years.
            \nAnswer:
            \nCalculation of adjusted profit
            \n\"Chapter
            \nTotal profit = 22,250 + 26, 250 + 25, 750 = \u20b9 74, 250
            \n\"Samacheer
            \nValuation of goodwill = Average profit x No.of year purchase
            \n= \u20b9 24, 750 x 2 years = \u20b9 49, 500<\/p>\n

            Weighted average profit method:
            \nQuestion 6.
            \nFind out the value of goodwill at three years purchase of weighted average profit of last four years.
            \n\"Samacheer
            \nAnswer:
            \nCalculation of weighted average profit
            \n\"Samacheer
            \nGoodwill = Weighted average profit x No. of years purchase
            \n= \u20b9 15,400 x 3 = \u20b9 46,200<\/p>\n

            Purchase of super profit method:
            \nQuestion 7.
            \nFrom the following details, calculate the value of goodwill at 2 years purchase of super profit:<\/p>\n

              \n
            1. Total assets of a firm are \u20b9 5,00,000<\/li>\n
            2. The liabilities of the firm are \u20b9 2,00,000<\/li>\n
            3. Normal rate of return in this class of business is 12.5 %.<\/li>\n
            4. Average profit of the firm is \u20b9 60,000.<\/li>\n<\/ol>\n

              Answer:
              \nCapital employed = fixed assets + current assets – current liabilities
              \n= 5, 00, 000 – 2, 00, 000 = 3, 00, 000
              \nNormal profit = Capital employed x Normal rate of return
              \n= 3,00,000 x \\(\\frac { 12.5 }{ 100 }\\) = 3, 75, 000
              \nSuper profit = Average profit – Normal profit
              \n= 60, 000 – 37, 500 = 22, 500
              \nGoodwill = Super profit x Number of years of purchase
              \n= \u20b9 22,500 x 2
              \n= \u20b9 45,000<\/p>\n

              Question 8.
              \nA partnership firm earned net profits during the last three years as follows:
              \n2016: \u20b9 20,000; 2017: \u20b9 17,000 and 2018: \u20b9 23,000
              \nThe capital investment of the firm throughout the above mentioned period has been \u20b9 80,000. Having regard to the risk involved, 15% is considered to be a fair return on capital employed in the business. Calculate the value of goodwill on the basis of 2 years purchase of super profit.
              \nAnswer:
              \nCalculation of average profit Year Profit
              \n\"Samacheer
              \nNormal profit = Capital employed x Normal rate of return
              \n= 80,000 x \\(\\frac { 15 }{ 100 }\\) = 12,000
              \nSuper profit = 8,000
              \nValuation of goodwill = Super profit x No. of years purchase
              \n= \u20b9 8,000 x 2
              \n= \u20b9 16,000<\/p>\n

              Annuity method:
              \nQuestion 9.
              \nFrom the following information, calculate the value of goodwill under annuity method:<\/p>\n

                \n
              1. Average profit – \u20b9 14,000<\/li>\n
              2. Normal profit – \u20b9 4,000<\/li>\n
              3. Normal rate of return – 15%<\/li>\n
              4. Years of purchase of goodwill – 5<\/li>\n<\/ol>\n

                Present value of \u20b9 1 for 5 years at 15% per annum as per the annuity table is 3.352
                \nAnswer:
                \nSuper profit = Average profit – Normal profit
                \n= 14, 000 – \u20b9 4, 000 = \u20b9 10, 000
                \nGoodwill = Super profit x Present value of annuity factor
                \n= \u20b9 10,000 x 3.352 = \u20b9 33, 520<\/p>\n

                Capitalisation of super profit method:
                \nQuestion 10.
                \nFind out the value of goodwill by capitalising super profits:<\/p>\n

                  \n
                1. Normal Rate of Return 10%<\/li>\n
                2. Profits for the last four years are \u20b9 30,000, \u20b9 40,000, \u20b9 50,000 and \u20b9 45,000.<\/li>\n
                3. Anon – recurring income of \u20b9 3,000 is included in the above mentioned profit of \u20b9 30,000.<\/li>\n
                4. Average capital employed is \u20b9 3,00,000.<\/li>\n<\/ol>\n

                  Answer:
                  \n\"Samacheer
                  \nAverage profit = \"Samacheer= \\(\\frac { 1, 62, 000 }{ 4 }\\)
                  \n= \u20b9 40,500
                  \nNormal profit = Capital employed x Normal rate of return
                  \n= 3,00,00 x \\(\\frac { 10 }{ 100 }\\) = 30,000
                  \nSuper profit = 10,500
                  \nCapitalisation super profit method = \"Samacheer x 100
                  \n= \\(\\frac { 10, 500 }{ 10 }\\) = \u20b9 1, 05, 000<\/p>\n

                  Capitalisation method:
                  \nQuestion 11.
                  \nFrom the following information, find out the value of goodwill by capitalisation method :<\/p>\n

                    \n
                  1. Average profit \u20b9 20, 000<\/li>\n
                  2. Normal rate of return 10%<\/li>\n
                  3. Tangible assets of the firm \u20b9 2, 20, 000<\/li>\n
                  4. Liabilities of the firm \u20b9 70, 000<\/li>\n<\/ol>\n

                    Answer:
                    \nCapital Assets – Liabilities
                    \n= 2, 20, 000 – 70, 000 = \u20b9 1, 50, 000
                    \nCapitalised value of business = \"Samacheer x 100
                    \n= \\(\\frac { 20, 000 }{ 10 }\\) x 100 = \u20b9 2, 00, 000
                    \nValue of goodwill = Total capitalised average profit – Capital employed
                    \n= 2, 00, 000 – 1, 50, 000
                    \n= \u20b9 50,000<\/p>\n

                    Samacheer Kalvi 12th Accountancy Goodwill in Partnership Accounts Additional Questions and Answers<\/h3>\n

                    I. Choose the correct answer<\/p>\n

                    Question 1.
                    \nGoodwill is valued under ………………
                    \n(a) Average profit method
                    \n(b) Super profit method
                    \n(c) Capitalisation method
                    \n(d) All of these
                    \nAnswer:
                    \n(d) All of these<\/p>\n

                    Question 2.
                    \nAverage profit method can be further divided ………………
                    \n(a) Simple average profit
                    \n(b) Weighted average profit
                    \n(c) Both (a) and (b)
                    \n(d) None of these
                    \nAnswer:
                    \n(c) Both (a) and (b)<\/p>\n

                    Question 3.
                    \nSuper profit is
                    \n(a) Average profit – Normal profit
                    \n(b) Normal profit – Average profit
                    \n(c) Both (a) and (b)
                    \n(d) None of these
                    \nAnswer:
                    \n(a) Average profit – Normal profit<\/p>\n

                    Question 4.
                    \nKinds of goodwill ………………
                    \n(a) Purchased goodwill
                    \n(b) Self – generated goodwill
                    \n(c) None of these
                    \n(d) Both (a) and (b)
                    \nAnswer:
                    \n(d) Both (a) and (b)<\/p>\n

                    Question 5.
                    \nNature of goodwill is ………………
                    \n(a) Reputation of business firm
                    \n(b) Profit of firm
                    \n(c) total asset of firm
                    \n(d) None of these
                    \nAnswer:
                    \n(a) Reputation of business firm<\/p>\n

                    Question 6.
                    \nFactor of goodwill is ………………
                    \n(a) Location of the business
                    \n(b) Efficient management
                    \n(c) Nature of the goods
                    \n(d) All of these
                    \nAnswer:
                    \n(b) Efficient management<\/p>\n

                    Question 7.
                    \nArrange the following in ascending or descending order:
                    \n1. Super profit = Weighted average profit x No. of years purchase
                    \n2. Capitalistion method = \"Samacheer x 100
                    \n3. Weighted Average method = Average profit – Normal profit
                    \n4. Capitalisation super profit = Total profit\/No. of years purchase
                    \n(a) 1, 2, 3, 4
                    \n(b) 2, 4, 1, 2
                    \n(c) 3, 4, 1, 2
                    \n(d) 4, 3, 2, 1
                    \nAnswer:
                    \n(c) 3, 4, 1, 2<\/p>\n

                    Question 8.
                    \nGoodwill of the firm on the basis of 2 years purchase of average profit of the last 3 years is \u20b9 25,000. Find average profit ………………
                    \n(a) \u20b9 50,000
                    \n(b) \u20b9 25,000
                    \n(c) \u20b9 10,000
                    \n(d) \u20b9 12,500
                    \nAnswer:
                    \n(a) \u20b9 50,000<\/p>\n

                    Question 9.
                    \nCalculate the value of goodwill at 3 years purchase when capital employed is \u20b9 2,50,000. Average profit \u20b9 30,000 and normal rate of return is 10% ………………
                    \n(a) \u20b9 3,000
                    \n(b) \u20b9 25,000
                    \n(c) \u20b9 30,000
                    \n(d) \u20b9 15,000
                    \nAnswer:
                    \n(d) \u20b9 15,000<\/p>\n

                    Question 10.
                    \nAdjusted profit = Actual profit
                    \n(a) + past expenses not required in the future
                    \n(b) – past revenue not likely to be eached in the future
                    \n(c) + additional income expected in the future
                    \n(d) All of these
                    \nAnswer:
                    \n(d) All of these<\/p>\n

                    II. Fill in the blanks:<\/p>\n

                    Question 11.
                    \nGoodwill brought in cash by new partner is divided among the old partner by debiting is ________ A\/c and crediting ________ A\/c.
                    \nAnswer:
                    \nGoodwill; capital.<\/p>\n

                    Question 12.
                    \nCalculation of goodwill under simple average profit method is ________
                    \nAnswer:
                    \nTotal profit = \"Samacheer<\/p>\n

                    Question 13.
                    \nSuper profit method normal profit is ________
                    \nAnswer:
                    \nNormal profit = Capital employed x Normal rate of return<\/p>\n

                    Question 14.
                    \nUnder average profit method ________
                    \nAnswer:
                    \n\"Samacheer x 100<\/p>\n

                    Question 15.
                    \nSuper profit = ________
                    \nAnswer:
                    \nAverage profit – Normal profit<\/p>\n

                    III. Short answer questions<\/p>\n

                    Question 1.
                    \nWhat are the nature of goodwill?
                    \nAnswer:
                    \nThe nature of the goodwill can be described as follows:<\/p>\n

                      \n
                    1. Goodwill is an tangible fixed asset. It is tangible because it has no physical existence. It cannot be seen or touched.<\/li>\n
                    2. It has a definite value depending on the profitability of the business enterprise.<\/li>\n
                    3. It cannot be separated from the business.<\/li>\n
                    4. It helps in earning more profit and attracts more customers.<\/li>\n
                    5. It can be purchased or sold only when the business is purchased or sold in full or in part.<\/li>\n<\/ol>\n

                      Question 2.
                      \nWhat is average profit method?
                      \nAnswer:
                      \nUnder this method, goodwill is calculated as certain years of purchase of average profits of the past years. The number of years of purchase is generally determined on the basis of the average period a new business will take in order to bring it to the current state of the existing business.<\/p>\n

                      Question 3.
                      \nWhat is meant by simple average profit method?
                      \nAnswer:
                      \nGoodwill is calculated by multiplying the average profit by a certain number of years of purchase. Simple average profit is calculated by adding the adjusted profits of certain number of years by dividing the total number of such years.
                      \nGoodwill = Average profit x Number of years purchase Total profit.
                      \nAverage profit = \"Samacheer<\/p>\n

                      Question 4.
                      \nWeighted average profit method.
                      \nAnswer:
                      \nGoodwill is calculated by multiplying the weighted average profit by a certain number of years of purchase.
                      \nGoodwill = Weighted average profit x Number of years purchase
                      \nIn this method, weights are assigned to each year\u2019s profit. Weighted profit is ascertained by multiplying the weights assigned with the respective year\u2019s profit.
                      \nWeighted average profit = \"Samacheer<\/p>\n

                      Question 5.
                      \nWhat is meant by annuity method of valuation of goodwill?
                      \nAnswer:
                      \nValue of goodwill is calculated by multiplying the super profit with the present value of annuity.
                      \nGoodwill = Super profit x Present value annuity factor
                      \nPresent value annuity factor is the present value of annuity of rupee one at a given time. It can be found out from annuity table or by using formula.<\/p>\n

                      Question 6.
                      \nWhat is annuity factor?
                      \nAnswer:
                      \nAnnuity refers to series of uniform cash flows at regular intervals. The table value gives the present value of annuity of rupee one received at the end of every year for a specified number of years.
                      \n\"Samacheer
                      \nwhere, i = interest rate ; n = estimated number of years<\/p>\n

                      Question 7.
                      \nWhat is capitalisation of super profit method?
                      \nAnswer:
                      \nUnder this method, value of goodwill is calculated by capitalising the super profit at normal rate of return, that is, goodwill is the capitalised value of super profit.
                      \nGoodwill = \"Samacheer x 100<\/p>\n

                      IV. Exercise<\/p>\n

                      Question 1.
                      \nGoodwill is to be valued at three years purchase of five years average profits. The profit for the last five years were 2010 – \u20b9 4,200; 2011 \u2014 \u20b9 4,500; 2012 – \u20b9 4,700; 2013 – \u20b9 4,600; and 2014 – \u20b9 5,000.
                      \nSolution:
                      \nCalculation of average profit:
                      \n\"Samacheer
                      \nCalculation of goodwill = Average profit x No. of years purchase
                      \n= \u20b9 4,600 x 3 = \u20b9 13,800<\/p>\n

                      Question 2.
                      \nA firm\u2019s profit for the last 5 years were \u20b9 20,000, \u20b9 30,000, \u20b9 40,000. \u20b9 50,000, and \u20b9 60,000. Calculated the value of firm\u2019s goodwill on the basis of three years purchase of weighted average profit after using weight of 1, 2, 3, 4, 5 respectively.
                      \nSolution:
                      \n\"Samacheer
                      \nGoodwill = Weighted avg. profit x Number of years purchase = 46,667 x 3 = \u20b9 1,40,000 (appr.)<\/p>\n

                      Question 3.
                      \nA business has earned average profit \u20b9 1,00,000 during the last few years and the normal rate of return in similar business is 10%. Find out the value of goodwill.<\/p>\n

                        \n
                      1. Capitalisation of super profit method.<\/li>\n
                      2. Super profit method of the goodwill is valued at 3 years purchase of super profit. The assets of the business were \u20b9 10,00,000 and liabilities of \u20b9 1,80,000.<\/li>\n<\/ol>\n

                        Solution:
                        \n1. Capital employed = Assets – libilities
                        \n= 10,00,000 – 1,80,000
                        \n= \u20b9 8,20,000
                        \nNormal profit = Capital employed x \"Samacheer
                        \n8,20,000 = 1 x \\(\\frac { 10 }{ 100 }\\) = 82,000
                        \nSuper profit = Average profit – Normal profit
                        \n= \u20b9 1,00,000 – \u20b9 82,000 = \u20b9 18,000<\/p>\n

                        2. Capitalisation method Super profit
                        \nGoodwill = \"Samacheer x 100
                        \n= \\(\\frac { 18, 000 }{ 10 }\\) = \u20b9 1, 80,000
                        \nas per super profit method Goodwill = super profit x No. of years purchase
                        \n= \u20b9 18000 x 3 = \u20b9 54,000<\/p>\n

                        Question 4.
                        \nThe average profit earned by the firm is Z 80,000 which includes under valuation of stock an average basis the capital invested in the business and normal rate of return is 8%. Calculate the goodwill of the firm on the basis of times the super profit.
                        \nSolution:
                        \nAverage profit – \u20b9 80,000
                        \n(A) Under value of stock – \u20b9 8,000
                        \nActual Average profit – \u20b9 88,000
                        \nNormal profit = Capital investment x Normal rate of return
                        \n= \u20b9 88,000 – \u20b9 64,000
                        \n= \u20b9 24,000
                        \nGoodwill = Super profit x 7
                        \n= \u20b9 24,000 x 7
                        \n= \u20b9 1,68,000<\/p>\n

                        Question 5.
                        \nCapital investment is \u20b9 5,00,000; firms profit \u20b9 1,50,000 Assuming that normal rate of return is 20%. Calculate the goodwill<\/p>\n

                          \n
                        1. Capitalisation method.<\/li>\n
                        2. Super profit method if the goodwill is valued @ 2 years purchase<\/li>\n<\/ol>\n

                          Solution:
                          \n1. Capitalisation of average profit method.
                          \nGoodwill = \"Samacheer x 100
                          \n= \\(\\frac { 1,50,000 }{ 20 }\\) = \u20b9 7,50,000
                          \nGoodwill = Total capital employed – capital employed
                          \n= \u20b9 7,50,000 – \u20b9 5,00,000 = \u20b9 2,50,000<\/p>\n

                          2. Super profit method
                          \nNormal profit = Capital employed x \"Samacheer
                          \nNormal profit = \u20b9 5,00,000 x \\(\\frac { 20 }{ 100 }\\) = \u20b9 1,00,000
                          \nSuper profit = Average profit – Normal profit
                          \n= \u20b9 1,50,000 – 1,00,000
                          \n= \u20b9 50,000
                          \nValue of Goodwill = Super profit x No. of years purchase
                          \n= \u20b9 50,000 x 2
                          \n= \u20b9 1,00,000<\/p>\n

                          Question 6.
                          \nCalculate the value of goodwill of the firm of 2 partners
                          \n(a) At the 3 years purchase of average profits
                          \n(b) At 3 years purchase of super profits
                          \n(c) On the basis of capitalisation of super profits
                          \n(d) On the basis of capitalisation of average profits<\/p>\n

                          (i) Average capital employed \u20b9 7,00,000
                          \n(ii) Net trading results of the firm 2014 – \u20b9 1,47,600 2015 – Loss \u20b9 1,48,100. Profit for 2016 – \u20b9 4,48,700
                          \n(iii) Rate of interest on capital @ 18%
                          \n(iv) Remunuration \u20b9 500\/- per month
                          \nSolution:
                          \nCalculation of Average profit and super profit
                          \nTotal profit = \u20b9 1,47,600 – \u20b9 1,48,100 + \u20b9 4,48,700 = \u20b9 4,48,200
                          \nAverage profit = \"Samacheer = \u20b9 1,49,400
                          \nLess: Remunration of 2 partner (2 x 500 x 1\/2) \\(\\frac { 12,000 }{ 1,37,400 }\\)
                          \nLess: Normal profit = Capital employed x \"Samacheer
                          \n= 7,00,000 x \\(\\frac { 18 }{ 100 }\\) = \u20b9 1,26,000
                          \nSuper profit = \u20b9 11,400<\/p>\n

                          (a) Average profit – Average profit x No. of year purchase
                          \n= \u20b9 1,37,400 x 3 = \u20b9 4,12,200<\/p>\n

                          (b) Super profit – Super profit x No. of year purchase
                          \n= \u20b9 11,400 x 3 = \u20b9 34,200<\/p>\n

                          (c) Capitalisation of super profit – \"Samacheer x 100
                          \n= \\(\\frac { 11,400 }{ 18 }\\) x 100
                          \n= \u20b9 63,333<\/p>\n

                          (d) Capitalisation of average profit = \"Samacheer x 100
                          \n= \\(\\frac { 1,37,400 }{ 100 }\\) x 100
                          \n= \u20b9 7,63,333
                          \n(-) Actual capital employed = \u20b9 7,00,000
                          \nGoodwill = \u20b9 63,333<\/p>\n","protected":false},"excerpt":{"rendered":"

                          Students can Download Accountancy Chapter 4 Goodwill in Partnership Accounts Questions and Answers, Notes Pdf, Samacheer Kalvi 12th Accountancy Book Solutions Guide Pdf helps you to revise the complete Tamilnadu State Board New Syllabus and score more marks in your examinations. Tamilnadu Samacheer Kalvi 12th Accountancy Solutions Chapter 4 Goodwill in Partnership Accounts Samacheer Kalvi …<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":""},"categories":[8],"tags":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/samacheerkalviguru.com\/wp-json\/wp\/v2\/posts\/11407"}],"collection":[{"href":"https:\/\/samacheerkalviguru.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/samacheerkalviguru.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/samacheerkalviguru.com\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/samacheerkalviguru.com\/wp-json\/wp\/v2\/comments?post=11407"}],"version-history":[{"count":0,"href":"https:\/\/samacheerkalviguru.com\/wp-json\/wp\/v2\/posts\/11407\/revisions"}],"wp:attachment":[{"href":"https:\/\/samacheerkalviguru.com\/wp-json\/wp\/v2\/media?parent=11407"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/samacheerkalviguru.com\/wp-json\/wp\/v2\/categories?post=11407"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/samacheerkalviguru.com\/wp-json\/wp\/v2\/tags?post=11407"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}