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CUET Accountancy 2025 PYQs13 May Shift 2. Free, no login required.

Partnership

past year questions, CUET Accountancy 2025 13 May Shift 2

Admission

past year questions, Partnership, CUET Accountancy 2025 13 May Shift 2

Easy

Read the passage carefully and answer the next 5 questions

The books of a business showed that the firm's capital employed on December 31, 2024, Rs. 5,00,000 and the profits for the last five years were: 2020-Rs. 40,000; 2021-Rs. 50,000; 2022-Rs. 55,000; 2023- Rs.70,000 and 2024-Rs. 85,000. You are required to find out the value of goodwill based on 2 years purchase of the super profits of the business, given that the normal rate of return is 10%.

In this case, Normal profit is -

Solution

✅ Correct Option: 1

Given information:

  • Capital Employed = Rs. 5,00,000
  • Normal Rate of Return = 10%

Normal Profit is the profit that a business should earn with the given capital employed at the normal rate of return prevailing in the industry.

Formula: Normal Profit = Capital Employed × Normal Rate of Return ÷ 100

Calculating Normal Profit:

Normal Profit = 5,00,000 × 10 ÷ 100

Normal Profit = Rs. 50,000

This means that with a capital of Rs. 5,00,000, the business should ordinarily earn Rs. 50,000 as profit if it generates returns at the normal industry rate of 10%. Any profit earned above this amount would be considered as super profit, which forms the basis for goodwill calculation.

Correct Answer: Option 1 - Rs. 50,000

Related questions:

2023: 20 June Shift 2

A newly admitted partner has the right to -

2026: 12 May Shift 1

In adjustment of capital during admission of a partner, certain steps are followed. Arrange them in a sequence:

(A) Calculation of new profit sharing ratio

(B) Calculate required capitals of old partners

(C) Calculate the cash to be brought in or withdrawn by old partners

(D) Calculate firm's capital

Choose the correct answer from the options given below:

2026: 13 May Shift 2

Mahesh and Ramesh share profits and losses in the ratio of 2:1. They admit Rahul as a new partner with 1/4 share in profits with a guarantee that his share of profit shall be at least Rs. 25,000. The net profit of the firm for the year ending March 31, 2025 was Rs. 80,000. What amount will be borne by Mahesh for the deficiency of Rahul's guaranteed profit?

2026: 21 May Shift 1

Anil and Uday are partners sharing profits equally. Arvind is admitted as a new partner. He brings Rs. 1,00,000 only out of his share of goodwill of Rs. 1,50,000. In this situation the journal entries will be:

2026: 21 May Shift 1

Match List-I with List-II

List-IList-II
(A) In this method, the person who purchases a running business must pay in the form of goodwill, a sum which is equal to the profits he is likely to receive for the first few years.(I) Capitalised value of business
(B) It is desirable to value goodwill on the basis of the excess profits and not the actual profits.(II) Goodwill
(C) Average Profits × 100/Normal Rate of Return(III) Super Profit Method
(D) Capitalised value – Net Assets(IV) Average profit Method

Choose the correct answer from the options given below:

2023: 20 June Shift 2

Arrange the following statements in proper sequence in context of admission of partner.

A. Finalising terms for admission of new partner

B. Calculation of sacrificing/ gaining ratio

C. Finalising balance in partner's capital A/c

D. Calculation of new profit sharing ratio

E. Valuation and adjustment of goodwill

Choose the correct answer from the options given below:

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