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Accountancy · 2025 · 3 marks
CBSE 2025 · Region 1 · Set 3 · Q20
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₹$\displaystyle 12,00,000$
= ₹$\displaystyle 1,20,000$………..……………………………………….…. $\displaystyle 1$/$\displaystyle 2$
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= ₹$\displaystyle 4,00,000$- ₹$\displaystyle 20,000$
= ₹$\displaystyle 3,80,000$……………………………………..1
Average Super profit/ Super profit = Average profit - Normal profit
=₹$\displaystyle 3,80,000$- ₹$\displaystyle 1,20,000$
=₹$\displaystyle 2,60,000$…………………………….………$\displaystyle 1$/$\displaystyle 2$
Goodwill= Super profit x Number of years’ purchase
= ₹$\displaystyle 2,60,000$ x $\displaystyle 3$
= ₹$\displaystyle 7,80,000$……………………………………………………………….…$\displaystyle 1$
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= ₹$\displaystyle 1,20,000$ +₹$\displaystyle 20,000$= ₹$\displaystyle 1,40,000$…. $\displaystyle 1$
Average profit= (₹$\displaystyle 3,00,000$+ ₹$\displaystyle 4,00,000$+ $\displaystyle 5,00,000$+ ₹$\displaystyle 4,00,000$)/$\displaystyle 4$
= ₹$\displaystyle 4,00,000$………………………………………………………… $\displaystyle 1$/$\displaystyle 2$
Average Super profit= Average profit - Normal profit
=₹$\displaystyle 4,00,000$- ₹$\displaystyle 1,40,000$
=₹$\displaystyle 2,60,000$………………………………………………………………$\displaystyle 1$/$\displaystyle 2$
Goodwill= Super profit x Number of years purchase
= ₹$\displaystyle 2,60,000$ x $\displaystyle 3$
= ₹$\displaystyle 7,80,000$……………………………………………………………….…$\displaystyle 1$
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CBSE Class 12 Accountancy past-paper question from the 2025board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.