At the time of admission, credit balance of Profit and Loss account appearing in books will be transferred to :

The profit for the five years of a firm are as follows – year 2013 Rs. 4,00,000; year 2014 Rs. 3,98,000; year 2015 Rs. 4,50,000; year 2016 Rs. 4,45,000 and year 2017 Rs. 5,00,000. The goodwill of the firm on the basis of 4 years purchase of 5 years average profits is-

Priya, Rama and Sona are partners in a firm sharing profits and losses equally. They decided to share the profits 3:3:2 w.e.f. April 1, 2025. Calculate gain or sacrifice of partners.

Identify the steps involved in calculating goodwill under the capitalized value of average profits method:

(A) Capitalize the average profits on the basis of the normal rate of return to ascertain the capitalized value of average profits

(B) Ascertain the average profits based on the past few years' performance

(C) Compute the value of goodwill by deducting net assets from the capitalized value of average profits

(D) Ascertain the actual firm's capital (net assets) by deducting outside liabilities from the total assets (excluding goodwill and fictitious assets)

Choose the correct answer from the options given below:

The new partner acquired the rights on admission into the firm. He acquires :

(A) Rights in past profits of firm before admission.

(B) Right to share in the future profits of the firm.

(C) Right to share assets of the firm.

(D) The right to carry on competing business.

Choose the correct answer from the options given below:

Any gain or loss arising from Adjustments for Revaluation of Assets and Reassessment of Liabilities shall be distributed among:

Arrange the following steps being used in calculating goodwill of the firm by Capitalisation of Super Profits.

A. Calculate normal profits on capital employed and average profit for past years.

B. Multiply the super profits by the required rate of return multiplier, i.e. Goodwill = Super Profits × 100/Normal Rate of Return

C. Calculate super profits by deducting normal profits from average profits.

D. Calculate capital of the firm, which is equal to total assets (excluding goodwill and fictitious assets) minus outside liabilities

Choose the correct answer from the options given below: