Mohan, Sohan and Suresh were partners in a firm sharing profits in the ratio of $\displaystyle 2$:$\displaystyle 2$:1. Suresh was guaranteed a profit of ₹ $\displaystyle 70$,000. Any deficiency on account of guarantee to Suresh was to be borne by Mohan and Sohan in $\displaystyle 3$:$\displaystyle 2$ ratio. The profit of the firm for the year ended $\displaystyle 31.3.2022$ amounted to ₹ $\displaystyle 2,00$,000. Prepare Profit and Loss Appropriation Account of the firm for the year ended 31.3.2022.

OR

A and B were partners in a firm sharing profits equally. Their capitals were : A ₹ $\displaystyle 1,20,000$ and B ₹ $\displaystyle 80$,000. The annual rate of interest is $\displaystyle 20$%. The profits of the firm for the last three years were ₹ $\displaystyle 34,000$, ₹ $\displaystyle 38,000$ and ₹ $\displaystyle 30$,000. They admitted C as a new partner. On C's admission the goodwill of the firm was valued at $\displaystyle 2$ years purchase of the super profits. Calculate the value of goodwill of the firm on C's admission.

Profit and Loss Appropriation A/c for the year ended $\displaystyle 31.3.2022$ Dr Cr. Particulars Amount Particulars Amount (₹) (₹) To Profit transferred to Partners’ By Profit & Loss A/c $\displaystyle 2,00,000$ Capital A/c’s: (Net Profit) ½ Mohan $\displaystyle 80,000$ Less:Guarantee to Suresh $\displaystyle (18,000)$ $\displaystyle 62,000$ Sohan $\displaystyle 80,000$ Less: Guarantee to Suresh $\displaystyle (12,000)$ $\displaystyle 68,000$ Suresh $\displaystyle 40,000$ Add: Guarantee from Mohan $\displaystyle 18,000$ Add: Guarantee from Sohan $\displaystyle 12,000$ $\displaystyle 70,000$ $\displaystyle 1$ ½ $\displaystyle 2,00,000$ $\displaystyle 2,00,000$ or Q. (b) A and B were partners…………………………………….. Ans. (b) Normal Profit= $\displaystyle 20$% of Capital Employed = $\displaystyle 20$/$\displaystyle 100$ x ₹$\displaystyle 2,00,000$= ₹$\displaystyle 40,000$ ……………$\displaystyle 1$ $\displaystyle 34$ , $\displaystyle 000$ + $\displaystyle 38$ , $\displaystyle 000$ + $\displaystyle 30$ , $\displaystyle 000$ $\displaystyle 102000$ Average Profit = = = ₹$\displaystyle 34,000$……$\displaystyle 1$ $\displaystyle 3$ $\displaystyle 3$ (i) Super Profit = Average Profit - Normal Profit = ₹$\displaystyle 34,000$- ₹$\displaystyle 40,000$ = - ₹$\displaystyle 6,000$ …………………….½ Note- Since there is no super profit, hence the firm does not have any goodwill. ½