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Accountancy · 2024 · 3 marks
CBSE 2024 · Region 5 · Set 1 · Q20
Sunny and Rohan were partners in a firm sharing profits and losses in the ratio of 2: 1. Their books showed that the capital employed on 31st March,…
Sunny and Rohan were partners in a firm sharing profits and losses in the ratio of $\displaystyle 2$ : 1. Their books showed that the capital employed on 31st March, $\displaystyle 2023$ was ₹ $\displaystyle 7,00$,000. The average profits earned by the firm were ₹ $\displaystyle 90$,000. Calculate the value of goodwill on the basis of $\displaystyle 5$ years purchase of super profits assuming that the normal rate of return is $\displaystyle 10$%.
Marking-scheme solution
Average Profits = ₹$\displaystyle 90,000$
Normal Profits= Normal rate of return x Capital Employed
$\displaystyle 100$
= $\displaystyle 10$/$\displaystyle 100$ x ₹$\displaystyle 7,00,000$
= ₹$\displaystyle 70,000$
Super Profits = Average Profits – Normal Profits
= ₹$\displaystyle 90,000$ - ₹$\displaystyle 70,000$
= ₹$\displaystyle 20,000$
Goodwill = Super Profits x Number of years purchase
Goodwill = ₹$\displaystyle 20,000$ x $\displaystyle 5$
= ₹$\displaystyle 1,00,000$
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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.