440 Views

Question : Anupma, Pumima and Ruchika are partners in a business. Balances in their Capital and Current Accounts as on 31st March. 2019 were :

                            Capital Account            Current Account

                                  (Rs.)                                (Rs.)

Anupma                6,00,000                         60,000 (Dr.)

Pumima                 5,00,000                        30,000 (Dr.)

Ruchika                  5,00,000                       10,000 (Cr.)

The firm earned an average profit of Rs.2,40,000. If the normal rate of return is 12%, the value of goodwill by Capitalisation of the Average Profit Method will be:

Option 1: 4,80,000

Option 2: 3.80,000

Option 3: 5,60,000

Option 4: Nil 


Team Careers360 16th Jan, 2024
Answer (1)
Team Careers360 24th Jan, 2024

Correct Answer: 4,80,000


Solution : Answer = 4,80,000

Total  capitalization value of the firm = 2,40,000X100/12=20,00,000

Net assets = 16,10,000-90,000= 15,20,000

Goodwill -=20,00,000-15,20,000=4,80,000
Hence, the correct option is 1.

Related Questions

MAHE Manipal M.Tech 2025
Apply
NAAC A++ Accredited | Accorded institution of Eminence by Govt. of India | NIRF Rank #4
Amity University, Noida Law A...
Apply
700+ Campus placements at top national and global law firms, corporates, and judiciaries
Amity University Noida B.Tech...
Apply
Among Top 30 National Universities for Engineering (NIRF 2024) | 30+ Specializations | AI Powered Learning & State-of-the-Art Facilities
Chandigarh University Admissi...
Apply
Ranked #1 Among all Private Indian Universities in QS Asia Rankings 2025 | Scholarships worth 210 CR
VIT Chennai LLM Admissions 2025
Apply
VIT Chennai LLM Admissions Open 2025 | #1st in Private Law Institute by IIRF Ranking | Experienced Faculty | World Class Infrastructure
Amity University, Noida BBA A...
Apply
Ranked amongst top 3% universities globally (QS Rankings)
View All Application Forms

Download the Careers360 App on your Android phone

Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile

150M+ Students
30,000+ Colleges
500+ Exams
1500+ E-books