Partnership

Admission

Medium

common

Vijay and Manohar share profits and losses in the ratio of 2:1. They admit Prakash as a partner with 1/4 share in profits with a guarantee that his share of profit will be at least Rs. 50,000. The net profit of the firm for the year ending March 31, 2015, was Rs. 1,60,000. Calculate the amount of profit Vijay will get.

Rs. 60,333

Rs. 73,333

Rs.50,300

Rs. 80,333

✅ Correct Option: 2

Given Information:

Old ratio (Vijay : Manohar) = 2:1
Prakash admitted with 1/4 share
Guarantee to Prakash = Minimum Rs. 50,000
Total Profit = Rs. 1,60,000

Calculating Prakash's normal share:

Prakash's share = $\frac{1}{4}$ × 1,60,000 = Rs. 40,000

Since Prakash's normal share (Rs. 40,000) is less than the guaranteed amount (Rs. 50,000), he will receive the guaranteed amount of Rs. 50,000.

Distribution of remaining profit:

When a partner has a guaranteed minimum and receives more than their normal share, the deficiency is borne by the old partners in their profit-sharing ratio.

Remaining profit for Vijay and Manohar = 1,60,000 - 50,000 = Rs. 1,10,000

This amount is distributed between Vijay and Manohar in their old ratio of 2:1.

Vijay's share = $\frac{2}{3}$ × 1,10,000 = Rs. 73,333.33

Manohar's share = $\frac{1}{3}$ × 1,10,000 = Rs. 36,666.67

Verification:

Total distribution = 73,333 + 36,667 + 50,000 = 1,60,000 ✓

Therefore, Vijay will get Rs. 73,333.

2025: 27 May Shift 2

Under which method is the goodwill valued at agreed number of years' purchase of the average profits of the past few years?

2026: 21 May Shift 1

The following steps are followed to ascertain average profit when goodwill is determined on the basis of super profit method. Arrange them in proper sequence.

(A) Ascertain super profit of the firm.

(B) Calculate goodwill of the firm on the basis of super profit.

(D) Find out normal profit of the firm.

Choose the correct answer from the options given below:

2026: 24 May Shift 1

Match List-I with List-II

List-I	List-II
(A) Average Profits × 100/Normal Rate of Return	(I) Normal Profit
(B) Firm's Capital × Normal Rate of Return/100	(II) Goodwill
(C) Total Profit /No.of years	(III) Capitalised value of average profits
(D) Super Profits × 100 /Normal Rate of Return	(IV) Average Profit

Choose the correct answer from the options given below:

2026: 21 May Shift 1

The General Reserve of Rs. 90,000 is appearing in balance sheet at the time of the change in profit sharing ratio among existing partners. The General Reserve would be transferred among:

2026: 11 May Shift 2

"Goodwill is the value of the reputation of a firm in respect of the profits expected in future over and above the normal profits." Which of the following statements are incorrect in the context of goodwill?

A. It is tangible asset.

B. Goodwill exists only when the firm earns super profits.

C. It is intangible asset.

D. Goodwill tends to be low if the business is centrally located or is at a place having heavy customer traffic,

Choose the correct answer from the options given below:

2026: 29 May Shift 2

Dhoni and Kohli share profits in the ratio of 3:2. Gill was admitted as a partner for 1/5 share. New profit sharing ratio, if Gill acquires 3/20 from Dhoni and 1/20 from Kohli, would be:

Solution

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