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CUET Accountancy 2025 PYQs3 June Shift 1. Free, no login required.

Partnership

past year questions, CUET Accountancy 2025 3 June Shift 1

Admission

past year questions, Partnership, CUET Accountancy 2025 3 June Shift 1

Medium

common

The capital of the firm is Rs. 1,00,000 and normal rate of return is 8%. If the average profits for last 5 years are Rs. 12,000 then find goodwill of the firm based on 3 years' purchase of super profits.

Solution

✅ Correct Option: 2

Given Information:

  • Capital = Rs. 1,00,000
  • Normal Rate of Return = 8%
  • Average Profits = Rs. 12,000
  • Years' purchase = 3 years

Calculation of Normal Profits:

Normal Profits = Capital × Normal Rate of Return ÷ 100

Normal Profits = 1,00,000 × 8 ÷ 100 = Rs. 8,000

Calculation of Super Profits:

Super Profits = Average Profits - Normal Profits

Super Profits = 12,000 - 8,000 = Rs. 4,000

Super profits represent the excess profits earned over and above the normal profits expected from the capital employed.

Calculation of Goodwill:

Goodwill = Super Profits × Number of years' purchase

Goodwill = 4,000 × 3 = Rs. 12,000

The firm earns Rs. 4,000 more than what is normally expected, and this super profit is valued at 3 years' purchase to arrive at the goodwill value.

Correct Option: 2 (Rs. 12,000)

Related questions:

2025: 29 May Shift 2

Match List-I with List-II

List-IList-II
(Items to be adjusted on admission)(side of account.)
(A) Existing goodwill(i) Debit of capital account.
(B) Increase in value of assets.(ii) Debit of revaluation account.
(C) Decrease in value of assets.(iii) Credit of revaluation account.
(D) New partner capital.(iv) Credit of capital account.

Choose the correct answer from the options given below:

2022: 30 Aug Shift 2

At the time of admission of a new partner general reserve appearing in the old balance sheet is transferred to _______

2026: 21 May Shift 2

A business has earned average profits of Rs. 50,000 during the last few years and the normal rate of return in a similar business is 10%. Ascertain the value of goodwill by capitalisation of average profits method, given that the value of net assets of the business is Rs. 4,10,000.

2025: 2 June Shift 2

The past average profits of a business works out at Rs. 20,000 and it is expected that such profits are likely to continue for another three years, the value of goodwill based on average profit method will be....... .

2022: 16 July Shift 2

Sunil and Ravi are partners in a firm sharing profits in the ratio of 3:1. Amar is admitted for 1/4 share. The Sacrificing ratio of Sunil and Ravi is

2023: 29 May Shift 2

Read the following facts about admission of a partner.

A. A new partner acquires his share from the old partners that reduces the old partners share in profits.

B. The partner's capital must be adjusted so as to be proportionate to their new profit sharing ratio.

C. Assets and Liabilities may be revalued and reassessed on admission of a partner.

D. Adjustment for Reserves and Accumulated profits/loss is done.

E. Profit sharing ratio of existing partners may change on admission of a new partner.

Choose the correct answer from the options given below:

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