Question : P , Q and R were partners. Their partnership deed provided that they were to share profits thus; P 26 per cent; Q 34 per cent; R 40 per cent; and that if a partner died, his capital should remain in the business for a stated period at a fixed rate of interest, but that the deceased partner’s share should be credited with an amount for Goodwill, based upon one and a half year’s average profits, for the five years prior to his death, but be subject to deduction of 5 per cent from the book debts. R died, and the profits of the firm for five years were agreed at Rs.20,000; Rs.30,000; Rs. 15,000 (loss); Rs.5,000 (loss); and Rs.45,000 respectively. Book Debts stood at Rs.90,000. Q. Net goodwill Rs ---
Option 1: Rs 22,500
Option 2: Rs 18,000
Option 3: Rs 20,000
Option 4: Rs 14,500
Correct Answer: Rs 18,000
Solution : Answer = Rs 18,000
Total profit = 20,000 + 30,000 + (-15000) + (-5000) + 45000 = 75000
Average profit = 75000/ 5 = 15000
Goodwill = 15000 x 1.5 = 22500
Total Goodwill Rs.22,500 Net Goodwill = 22,500 - 4,500 (5% of Book Debts) = Rs. 18,000 Hence, the correct option is 2.
Question : P, Q and R were partners. Their partnership deed provided that they were to share profits thus; P 26 per cent; Q 34 per cent; R 40 per cent; and that if a partner died, his capital should remain in the business for a stated period at a fixed rate of interest, but
Question : In the partnership agreement between R Sand T who were sharing profits in the ratio of 5 : 3 : 2, the goodwill was to be valued on the death of any partner on the basis of such partner’s share of 2 year’s profits calculated on the average of 5 year’s
Question : P, R and S are in partnership sharing profits 4/8, 3/8 and 1/8 respectively. It is provided under the partnership deed that on the death of any partner his share of goodwill is to be valued at one-half of the net profits credited to his account during the last 4 completed
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile