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Accountancy · 2024 · 3 marks
CBSE 2024 · Region 2 · Set 3 · Q20
On 1st April, 2023, the books of the firm of Kashish and Sagar showed assets of ₹ 9,00,000 including cash of ₹ 32,000 and bank balance of ₹ 1,68,000.…
On 1st April, $\displaystyle 2023$, the books of the firm of Kashish and Sagar showed assets of ₹ $\displaystyle 9,00,000$ including cash of ₹ $\displaystyle 32,000$ and bank balance of ₹ $\displaystyle 1,68,000$ . The partners' capital accounts showed a balance of ₹ $\displaystyle 6,00,000$ and reserves constituted the rest. If the normal rate of return is $\displaystyle 8$% and the goodwill of the firm is valued at ₹ $\displaystyle 4,00,000$ at $\displaystyle 5$ years purchase of super profits, find the average profits of the firm.
Marking-scheme solution
Goodwill = No. of years’ purchase X Super Profits
₹$\displaystyle 4,00,000$ = $\displaystyle 5$ X Super Profits
Super Profits = ₹$\displaystyle 80,000$ $\displaystyle 1$
Capital Employed= Total Assets- Outside Liabilities
= ₹$\displaystyle 9,00,000$- Nil= ₹$\displaystyle 9,00,000$
Normal Profit =$\displaystyle 8$% of ₹$\displaystyle 9,00,000$ = ₹$\displaystyle 72,000$ $\displaystyle 1$
Super Profit= Average Profit - Normal Profit
₹$\displaystyle 80,000$ = Average profit - ₹$\displaystyle 72,000$
Average Profit = ₹$\displaystyle 1,52,000$ $\displaystyle 1$
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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.