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Accountancy · 2024 · 3 marks
CBSE 2024 · Region 2 · Set 2 · Q20
On 1st April, 2023, the books of a partnership firm showed assets of ₹ 5,00,000 including cash of ₹ 23,000 and bank balance of ₹ 27,000. The…
On 1st April, $\displaystyle 2023$, the books of a partnership firm showed assets of ₹ $\displaystyle 5,00,000$ including cash of ₹ $\displaystyle 23,000$ and bank balance of ₹ $\displaystyle 27$,000. The partners' capital accounts showed a balance of ₹ $\displaystyle 3,50,000$ and reserves constituted the rest. If the normal rate of return is $\displaystyle 10$% and the goodwill of the firm is valued at ₹ $\displaystyle 1,00,000$ at $\displaystyle 4$ years purchase of super profits, find the average profits of the firm.
Marking-scheme solution
Goodwill = No. of years’ purchase X Super Profits
₹$\displaystyle 1,00,000$ = $\displaystyle 4$ X Super Profits
Super Profits = ₹$\displaystyle 25,000$ $\displaystyle 1$
Capital Employed= Total Assets- Outside Liabilities
= ₹$\displaystyle 5,00,000$- Nil= ₹$\displaystyle 5,00,000$
Normal Profit = $\displaystyle 10$% of ₹$\displaystyle 5,00,000$ = ₹$\displaystyle 50,000$ $\displaystyle 1$
Super Profit = Average Profit - Normal Profit
₹$\displaystyle 25,000$ = Average Profit - ₹$\displaystyle 50,000$
Average Profit = ₹$\displaystyle 75,000$ $\displaystyle 1$
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CBSE Class 12 Accountancy past-paper question from the 2024 board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.