question_answer

You are required to answer the following questions 1 to 6:

X and Y have started a business in partnership 6 years back and they were running their business without any problem. Due to Covid-19 Pandemic Lockdown they faced a lot of problem. After the Lockdown they found that they need more capital to establish their business once again. For this purpose they admitted a new partner Z. New ratio was decided 5:3:2. He brings Rs.7,00,000 as his capital and his share of goodwill in cash. It was decided that goodwill of the firm is to be calculated on the basis of 3 years purchase of the average profits of the last 5 years.

Profits from the year when they started business to the date are as follows:

Year 2015 -16 2016 -17 2017-18 2018 -19 2019 - 20 2020 - 21 Profit/loss 1,00,000 4,00,000 5,00,000 (60,000) 1,50,000 2,50,000

Additional Information :

(i) On 1st January, 2019, a fire broke out which resulted into a loss of goods of Rs.3,00,000. A claim of Rs.70,000 a as received from the insurance company.

(ii) During the year ended 31st March, 2021 the firm received an unexpected tax refund of Rs.80,000.

Adjusted profit/loss for the year 2018-19:

A) Loss 60,000

B) 2,40,000 Profit

C) 10,000 Profit

D) 1,70,000 Profit