Question : Information:
Capital accounts of partners N and V = Rs 5,00,000 each. Balance in the current account of N and V Rs 50,000 and Rs 40,000 respectively. Bank loan = Rs 10,00,000. Goodwill Rs 50,000 investment Rs 25,000. Advertisement suspense = Rs 15,000. Based on the above information, capital employed for the purpose of valuation of goodwill will be:
Option 1: Rs 10,90,000
Option 2: Rs 10,75,000
Option 3: Rs 10,00,000
Option 4: Rs 10,40,000
Correct Answer: Rs 10,00,000
Solution : Answer = Rs 10,00,000
Capital employed = Capital of partners + balance of the current account – Goodwill – investment – fictitious assets
5,00,000 + 5,00,000 + 50,000 + 40,000 - 50,000 - 25,000 - 15,000 = Rs 10,00,000.
Hence, the correct option is 3.
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