Partnership

Admission

Medium

common

The profits of the firm for the five years are as follows:

Year Profit (Rs.)
2012-13 20,000
2013-14 24,000
2014-15 30,000
2015-16 25,000
2016-17 18,000

Calculate the value of goodwill on the basis of three years' purchase of weighted average profits based on weights of the last five years as 1,2,3,4 and 5 respectively.

Year	Profit (Rs.)
2012-13	20,000
2013-14	24,000
2014-15	30,000
2015-16	25,000
2016-17	18,000

Rs. 79,600

Rs. 60,500

Rs. 80,600

Rs. 69,600

✅ Correct Option: 4

To find goodwill based on weighted average profits, we need to assign weights to each year's profit and calculate the weighted average.

Assigning weights: The most recent year gets the highest weight (5) and the oldest year gets the lowest weight (1).

Year	Profit (Rs.)	Weight	Weighted Profit (Rs.)
2012-13	20,000	1	20,000
2013-14	24,000	2	48,000
2014-15	30,000	3	90,000
2015-16	25,000	4	1,00,000
2016-17	18,000	5	90,000
Total		15	3,48,000

Weighted Average Profit Formula:

$\text{Weighted Average Profit} = \frac{\text{Sum of Weighted Profits}}{\text{Sum of Weights}}$

$\text{Weighted Average Profit} = \frac{3,48,000}{15} = 23,200$

Goodwill Calculation:

$\text{Goodwill} = \text{Weighted Average Profit} \times \text{Number of years' purchase}$

$\text{Goodwill} = 23,200 \times 3 = 69,600$

Therefore, Goodwill = Rs. 69,600

2022: 20 July Shift 1

Value of stock to be shown in Balance sheet after admission will be :

2025: 13 May Shift 2

In this case Average profit is -

2026: 6 June Shift 1

At the time of admission, if goodwill was raised but not written off then its impact will be:

2025: 13 May Shift 2

Arrange in correct sequence at a time of admission of partner-

(A) Adjustments of capital accounts.

(B) Valuation of goodwill

Choose the correct answer from the options given below:

2026: 23 May Shift 2

For transferring the revaluation loss, which of the following is correct ?

2026: 31 May Shift 1

Ambar, Bimla and Tara are partners in a firm sharing profits in the ratio of 3:2:1. Adnan is admitted into the firm for 1/4 share in profits, which he gets as 1/8 from Ambar and 1/8 from Bimla. The total capital of the firm is agreed upon as Rs. 1,20,000 and Adnan is to bring in cash equivalent to 1/4 of this amount as his capital. The capitals of other partners are also to be adjusted in the ratio of their respective shares in profits. The capitals of Ambar, Bimla and Tara after all adjustments are Rs. 40,000, Rs. 35,000 and Rs. 30,000 respectively. Calculate the cash brought in or paid to each partner.

Choose the correct answer from the options given below:

Solution

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CUET Accountancy Past Year Questions (Topic-Wise)