✓ Board-verified
Accountancy · 2025 · 3 marks
CBSE 2025 · Region 1 · Set 3 · Q20
The capital of the firm of Seema and Avi is ₹ 12.00.000 and the market rate of interest is 10%. Salary of each partner is ₹ 10,000 per annum. The…
The capital of the firm of Seema and Avi is ₹ $\displaystyle 12.00.000$ and the market rate of interest is $\displaystyle 10$%. Salary of each partner is ₹ $\displaystyle 10,000$ per annum. The profits for the last four years were ₹ $\displaystyle 3,00,000$, ₹ $\displaystyle 4,00,000$, ₹ $\displaystyle 5,00,000$ and ₹ $\displaystyle 4,00,000$ respectively. Goodwill of the firm is to be valued on the basis of three years purchase of last four years average super profits. Calculate the goodwill of the firm.
Marking-scheme solution
Goodwill= Super profit x Number of years’ purchase
Normal profit= Normal Rate of return/$\displaystyle 100$ x Capital Employed
= $\displaystyle 10$/$\displaystyle 100$ x₹$\displaystyle 12,00,000$
= ₹$\displaystyle 1,20,000$
Average profit= (₹$\displaystyle 3,00,000$+ ₹$\displaystyle 4,00,000$+ $\displaystyle 5,00,000$+ ₹$\displaystyle 4,00,000$)/$\displaystyle 4$
= ₹$\displaystyle 4,00,000$
Average profit less partners’ salary= ₹$\displaystyle 4,00,000$- ₹$\displaystyle 20,000$
= ₹$\displaystyle 3,80,000$
Average Super profit/ Super profit = Average profit - Normal profit
=₹$\displaystyle 3,80,000$- ₹$\displaystyle 1,20,000$
=₹$\displaystyle 2,60,000$
Goodwill= Super profit x Number of years’ purchase
= ₹$\displaystyle 2,60,000$ x $\displaystyle 3$
= ₹$\displaystyle 7,80,000$
Alternate answer:
Interest on capital employed= $\displaystyle 10$/$\displaystyle 100$ x₹$\displaystyle 12,00,000$= ₹$\displaystyle 1,20,000$
Partners salary= ₹$\displaystyle 10,000$ +₹$\displaystyle 10,000$ = ₹$\displaystyle 20,000$
Normal Profit= Interest on capital employed + Partners’ salary= ₹$\displaystyle 1,20,000$ +₹$\displaystyle 20,000$= ₹$\displaystyle 1,40,000$
Average profit= (₹$\displaystyle 3,00,000$+ ₹$\displaystyle 4,00,000$+ $\displaystyle 5,00,000$+ ₹$\displaystyle 4,00,000$)/$\displaystyle 4$
= ₹$\displaystyle 4,00,000$
Average Super profit= Average profit - Normal profit
=₹$\displaystyle 4,00,000$- ₹$\displaystyle 1,40,000$
=₹$\displaystyle 2,60,000$
Goodwill= Super profit x Number of years purchase
= ₹$\displaystyle 2,60,000$ x $\displaystyle 3$
= ₹$\displaystyle 7,80,000$
All Reconstitution of a Partnership Firm – Admission of a Partner questions2025 question paperPractice Reconstitution of a Partnership Firm – Admission of a Partner →
More from Reconstitution of a Partnership Firm – Admission of a Partner
- Asha and Indra were partners in a firm sharing profits and losses in the ratio of 3: 2. Their Balance Sheet on 31st March, 2025 was as following:…2026
- Devki and Neena were partners in a firm sharing profits and losses in the ratio of 4:3. Amar was admitted as a new partner for 1/5 h share in the…2026
- Alex, Benn and Cole were partners in a firm sharing profits and losses in 1th the ratio of 5: 3: 2. They admitted Dona as a new partner for share 5…2024
- Sanjay and Vijay were partners in a firm sharing profits and losses in the ratio of 4: 3. On 1st April, 2025 they admitted Babul as a new nth...,..…2026
- The goodwill of a firm was valued on the basis of 3 years purchase of average profits for the last four years. The profits of last four years ending…2023
- Mansi and Uma were partners in a firm and their capitals were 4,00,000 and ₹ 2,00,000 respectively. Normal rate of return in a similar business was…2026
- Atul, Beena and Sita were partners in a firm sharing profits and losses in the ratio of 8: 7: 5. Damini was admitted as a new 1th partner for share…2024
- Bhawana and Vedika were partners in a firm sharing profits and losses in the ratio of 5: 4. From 1st April, 2024 they decided to share future profits…2025
CBSE Class 12 Accountancy past-paper question from the 2025 board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.