1.
Akansha, Chetna and Dipanshu are partners in a firm sharing profits and losses in the
ratio of 3:2:1. They decided to take Jatin into partnership firm January 1, 2015 for 1/5
share in the future profits. For this purpose, goodwill is to be valued at 2 times the average
annual profits of the previous four years. The profits for the past four years were.
Year (Rs)
2012 96,000
2013 60,600
2014 62,400
2015 84,400
Calculate the value of goodwill.
2: The profits of a firm for the last five years were:
Year 2011 2012 2013 2014 2015
Profits (Rs) 43,000 50,000 52,000 65,000 85,000
Calculate the value of goodwill on the basis of two years of purchase of weighted average
profits, the weights to be used are 2011-1, 2012-2, 2013-3, 2014-4 and 2015-5.
3. A firm earned net profits during the last three years as:
Year 2012-13 2013-14 2014-15
Profits (Rs) 36,000 40,000 44,000
The capital investment of the firm is Rs. 1,20,000. A fair return on the capital having
regard to the risk involved is 10%. Calculate the value of goodwill on the basis of three
years purchase of the super profit for the last three years.
4. A earns Rs. 1,20,000 as its annual profits, the rates of normal profit being 10%. The
assets of the firm amounted to Rs. 14,40,000 and liabilities to Rs. 4,80,000. Find out the
value of goodwill by capitalization method.
5.A and B are partners in a firm. They admit C into the firm. The goodwill for the purpose
is to be calculated at 2 year’s purchase of the average normal profits of the last three years
which were Rs. 10,000, Rs. 15,000 and Rs. 30,000 respectively. Second year's profit included
profit on sale of Machinery Rs. 10,000. Find the value of goodwill of the firm on C’s
Admission.
6. The average net profits expected of a firm in future are Rs. 68,000 per year and capital
invested in the business by the firm is Rs. 3,50,000. The rate of interest expected from
capital invested in this class of business is 12%. The remuneration of the partners is
estimated to be Rs. 8,000 for the year. You are required to find out the value of goodwill on
the basis of two years’ purchase of super profits.
7.On April 1st, 2014 an existing firm had assets of Rs. 75,000 including cash of Rs. 5,000.
The partners’ capital accounts showed a balance of Rs. 60,000 and reserves constituted the
rest. If the normal rate of return is 20% and the goodwill of the firm is valued at Rs. 24,000
at 4 years purchase of super profits, find the average profits of the firm.
8.M/s Aradhya having the assets of Rs 10,00,000 and Liabilities of Rs 4,20,000. The firm
earns an annual profit of Rs. 90,000. The rate of interest expected from the capital having
regard to the risk involved is 15%. Calculate the amount of Goodwill by Capitalisation of
Super Profit method.
9. A business earned average profits of Rs. 1,00,000 during the last few years. The normal
rate of return in a similar type of business is 10%. The assets of the business were Rs.
10,00,000 and external liabilities was Rs. 1,80,000. Calculate the value of goodwill of the
firm by super profit method, if the goodwill is valued at 2 1/2 years’ purchase of super
profits.
10.A business has earned average profits of Rs. 1,00,000 during the last few years and the
normal rate of return in similar business is 10%. Find out the value of goodwill by
(i) Capitalisation of super profit method.
(ii) Super profit method, if the goodwill is valued at 3 years’ purchase of super profit. The
assets of the business were Rs. 10,00,000 and its external liabilities Rs. 1,80,000.
