Partnership

Admission

Easy

common

Arrange the following steps for calculation of goodwill using the Super Profit Method:

(A) Calculate goodwill by multiplying the super profits by the given number of years' purchase.

(B) Calculate the super profits by deducting normal profit from the average profits.

(C) Calculate the normal profit on the firm's capital on the basis of the normal rate of return.

(D) Calculate the average profit.

Choose the correct answer from the options given below:

(A), (B), (C), (D)

(D), (C), (B), (A)

(B), (D), (C), (A)

(D), (B), (A), (C)

✅ Correct Option: 2

Under the super profit method the order is: first find average profit (D), then normal profit using the normal rate of return on capital employed (C), then super profit as average profit minus normal profit (B), and finally goodwill as super profit multiplied by the number of years' purchase (A).

2022: 16 July Shift 2

Sometimes the value of Goodwill is not given at the time of admission/retirement of a partner. In such a situation, it has to be inferred from capital and profit sharing ratio. such Goodwill is called

2024

Kavita and Lalita are partners, sharing profits in the ratio of 2:1. They decide to admit Mohan for 1/4th share in profits with a guaranteed amount of ₹ 25,000. Both Kavita and Lalita undertake to meet the liability arising due to the guaranteed amount to Mohan in their respective profit sharing ratio. The firm earned profits of ₹ 76,000 for the year 2022-23. The deficiency borne by Kavita is:

2026: 19 May Shift 1

Mohit and Rohan share profits and losses in the ratio of 3:1. They admit Rahul and Meena as partners with 1/4 share each in the profits with a guarantee that Rahul's share of profit shall be at least Rs. 60,000. Any deficiency in the share will be borne by Mohit and Rohan in their profit sharing ratio. The net profit of the firm for the year ending March 31, 2025 was Rs. 2,00,000. Find the share in deficiency borne by Mohit.

2025: 14 May Shift 2

Identify the incorrect journal entry related to Revaluation of Assets and Liabilities of a firm.

2026: 24 May Shift 1

Arrange the following steps involved under super profit method of calculating goodwill in a sequence:

(A) Calculate the normal profit on the firm's capital on the basis of the normal rate of return.

(B) Calculate the super profits by deducting normal profit from the average profits.

(D) Calculate the average profit.

Choose the correct answer from the options given below:

2025: 30 May Shift 2

The minimum guaranteed amount shall be paid to the new partner when his share of profit as per the profit sharing ratio:

Solution

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