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12th Class Accountancy Fundamentals of Partnership Question Bank MCQs - Accounting for Partnership Firm : Fundamental

  • question_answer
    A firm earns Rs. 110,000.The normal rate of return is 10%.The assets of the firm amounted to Rs.11,00,000 and liabilities Rs.1,00,000. Value of goodwill by capitalisation of average actual profits will be:

    A) Rs.2,00,000         

    B) Rs.10,000

    C) Rs.5,000               

    D) Rs.1,00,000

    Correct Answer: D

    Solution :

    [d] Rs.1,00,000
    Hint: Capital Employed (Net Assets) = Total Assets - Liabilities
    =11,00,000 -1,00,000    
    = Rs.10,00,000
    Capitalised Value of Profits
    \[\frac{Average\,Profits}{Normal\,Rate\,of\,Return}\times 100\]
    \[\frac{1,10,000}{10}\times 100\,\]= Rs.11,00,000
    Goodwill = Capitalised Value of Profits - Capital Employed (Net Assets)
    = 11,00,000 - 10,00,000 = Rs.1,00,000
     


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