Double Entry Book Keeping Ts Grewal (2016) Solutions for Class 12 Commerce Accountancy Chapter 3 Goodwill: Concept And Mode Of Valuation are provided here with simple step-by-step explanations. These solutions for Goodwill: Concept And Mode Of Valuation are extremely popular among class 12 Commerce students for Accountancy Goodwill: Concept And Mode Of Valuation Solutions come handy for quickly completing your homework and preparing for exams. All questions and answers from the Double Entry Book Keeping Ts Grewal (2016) Book of class 12 Commerce Accountancy Chapter 3 are provided here for you for free. You will also love the ad-free experience on Meritnation’s Double Entry Book Keeping Ts Grewal (2016) Solutions. All Double Entry Book Keeping Ts Grewal (2016) Solutions for class 12 Commerce Accountancy are prepared by experts and are 100% accurate.
Page No 3.17:
Question 1:
Answer:
Number of years’ purchase = 3
Page No 3.17:
Question 2:
Number of years’ purchase = 3
Answer:
Calculation of Average Profit
2012–13 = 1,00,000 – 12,500 = 87,500
2013–14 = 1,25,000 + 25,000 = 1,50,000
2014–15 = 1,12500 – 12,500 = 1,00,000
Total Profits for last three years = 3,37,500
Page No 3.18:
Question 3:
Calculation of Average Profit
2012–13 = 1,00,000 – 12,500 = 87,500
2013–14 = 1,25,000 + 25,000 = 1,50,000
2014–15 = 1,12500 – 12,500 = 1,00,000
Total Profits for last three years = 3,37,500
Answer:
Calculation of average profits for the last three years
Calculation of average profits for the last four years
Average Profits for last four years is higher than the Average Profits for last three years. Thus, Goodwill of the firm is 2,27,550.
Page No 3.18:
Question 4:
Calculation of average profits for the last three years
Calculation of average profits for the last four years
Average Profits for last four years is higher than the Average Profits for last three years. Thus, Goodwill of the firm is 2,27,550.
Answer:
Year |
Profit |
2013-14 |
8,00,000 |
2012-13 |
15,00,000 |
2011-12 |
18,00,000 |
2010-11 |
(4,00,000) |
2009-10 |
13,00,000 |
Total Profit |
50,00,000 |
Goodwill = Avg. Profits No. of Years' Purchase
= 10,00,000 3
= Rs 30,00,000
Page No 3.18:
Question 5:
Year |
Profit |
2013-14 |
8,00,000 |
2012-13 |
15,00,000 |
2011-12 |
18,00,000 |
2010-11 |
(4,00,000) |
2009-10 |
13,00,000 |
Total Profit |
50,00,000 |
Goodwill = Avg. Profits No. of Years' Purchase
= 10,00,000 3
= Rs 30,00,000
Answer:
Year
|
2009–10
|
2010–11
|
2011–12
|
2012–13
|
2013–14
|
Profit/Loss |
1,50,000
|
3,50,000
|
5,00,000
|
7,00,000
|
(6,00,000)
|
Add: Wrong Debit |
|
|
|
|
1,00,000
|
Less: Depreciation |
|
|
|
|
(25,000)
|
Total
|
1,50,000
|
3,50,000
|
5,00,000
|
7,00,000
|
(5,25,000)
|
Page No 3.18:
Question 6:
Year
|
2009–10
|
2010–11
|
2011–12
|
2012–13
|
2013–14
|
Profit/Loss |
1,50,000
|
3,50,000
|
5,00,000
|
7,00,000
|
(6,00,000)
|
Add: Wrong Debit |
|
|
|
|
1,00,000
|
Less: Depreciation |
|
|
|
|
(25,000)
|
Total
|
1,50,000
|
3,50,000
|
5,00,000
|
7,00,000
|
(5,25,000)
|
Answer:
Year |
Profit |
× |
Weight |
= |
Product |
2012 |
20,000 |
× |
1 |
= |
20,000 |
2013 |
24,000 |
× |
2 |
= |
48,000 |
2014 |
30,000 |
× |
3 |
= |
90,000 |
2015 |
25,000 |
× |
4 |
= |
1,00,000 |
2016 |
18,000 |
× |
5 |
= |
90,000 |
Total |
|
|
15 |
|
3,48,000 |
|
|
|
|
|
|
Page No 3.18:
Question 7:
Year |
Profit |
× |
Weight |
= |
Product |
2012 |
20,000 |
× |
1 |
= |
20,000 |
2013 |
24,000 |
× |
2 |
= |
48,000 |
2014 |
30,000 |
× |
3 |
= |
90,000 |
2015 |
25,000 |
× |
4 |
= |
1,00,000 |
2016 |
18,000 |
× |
5 |
= |
90,000 |
Total |
|
|
15 |
|
3,48,000 |
|
|
|
|
|
|
Answer:
Calculation of Normal Profit
Year |
Particulars |
|
Normal Profit |
2005 |
25,000 - 5000 (Management Cost) |
= |
20,000 |
2006 |
27,000 + 10,000 (Plant Repair) – 1,000 (Deprecation) – 1000 (Closing Stock) - 5000 (Management Cost) |
= |
30,000 |
2007 |
46,900 – 900 (Deprecation) +1,000 (Opening Stock) – 2,000 (Closing Stock) – 5,000 (Management Cost) |
= |
40,000 |
2008 |
53,810 – 810 (Deprecation) + 2,000 (Opening Stock) – 5,000 (Management Cost) |
= |
50,000 |
Calculation of Weighted Profit
Year |
Normal Profit |
× |
Weight |
= |
Product |
2005 |
20,000 |
× |
1 |
= |
20,000 |
2006 |
30,000 |
× |
2 |
= |
60,000 |
2007 |
40,000 |
× |
3 |
= |
1,20,000 |
2008 |
50,000 |
× |
4 |
= |
2,00,000 |
|
Total |
|
10 |
|
4,00,000 |
|
|
|
|
|
|
Page No 3.19:
Question 8:
Calculation of Normal Profit
Year |
Particulars |
|
Normal Profit |
2005 |
25,000 - 5000 (Management Cost) |
= |
20,000 |
2006 |
27,000 + 10,000 (Plant Repair) – 1,000 (Deprecation) – 1000 (Closing Stock) - 5000 (Management Cost) |
= |
30,000 |
2007 |
46,900 – 900 (Deprecation) +1,000 (Opening Stock) – 2,000 (Closing Stock) – 5,000 (Management Cost) |
= |
40,000 |
2008 |
53,810 – 810 (Deprecation) + 2,000 (Opening Stock) – 5,000 (Management Cost) |
= |
50,000 |
Calculation of Weighted Profit
Year |
Normal Profit |
× |
Weight |
= |
Product |
2005 |
20,000 |
× |
1 |
= |
20,000 |
2006 |
30,000 |
× |
2 |
= |
60,000 |
2007 |
40,000 |
× |
3 |
= |
1,20,000 |
2008 |
50,000 |
× |
4 |
= |
2,00,000 |
|
Total |
|
10 |
|
4,00,000 |
|
|
|
|
|
|
Answer:
Goodwill = Weighted Average Profit × No. of years purchase
Year
|
Profit before Salary
|
Salary
|
Profit after Salary
|
Weights
|
Weighted Profit
|
A
|
B
|
C = A – B
|
D
|
E = C × D | |
2012
|
1,40,000
|
90,000
|
50,000
|
1
|
50,000
|
2013
|
1,01,000
|
90,000
|
11,000
|
2
|
22,000
|
2014
|
1,30,000
|
90,000
|
40,000
|
3
|
1,20,000
|
|
|
|
Total
|
6 |
1,92,000
|
Page No 3.19:
Question 9:
Goodwill = Weighted Average Profit × No. of years purchase
Year
|
Profit before Salary
|
Salary
|
Profit after Salary
|
Weights
|
Weighted Profit
|
A
|
B
|
C = A – B
|
D
|
E = C × D | |
2012
|
1,40,000
|
90,000
|
50,000
|
1
|
50,000
|
2013
|
1,01,000
|
90,000
|
11,000
|
2
|
22,000
|
2014
|
1,30,000
|
90,000
|
40,000
|
3
|
1,20,000
|
|
|
|
Total
|
6 |
1,92,000
|
Answer:
Year |
Actual Profit |
+ |
Abnormal Loss Non-recurring |
– |
Abnormal Gain Non-recurring |
= |
Normal Profit |
2013 |
50,000 |
+ |
Nil |
– |
5,000 |
= |
45,000 |
2014 |
(20,000) |
+ |
30,000 |
– |
Nil |
= |
10,000 |
2015 |
70,000 |
+ |
Nil |
– |
18,000+8,000 |
= |
44,000 |
Normal Profit for 3 Years |
99,000 |
||||||
|
|
Number of years’ purchase = 2
Page No 3.19:
Question 10:
Year |
Actual Profit |
+ |
Abnormal Loss Non-recurring |
– |
Abnormal Gain Non-recurring |
= |
Normal Profit |
2013 |
50,000 |
+ |
Nil |
– |
5,000 |
= |
45,000 |
2014 |
(20,000) |
+ |
30,000 |
– |
Nil |
= |
10,000 |
2015 |
70,000 |
+ |
Nil |
– |
18,000+8,000 |
= |
44,000 |
Normal Profit for 3 Years |
99,000 |
||||||
|
|
Number of years’ purchase = 2
Answer:
Calculation of Average Profit for Five Years
Calculation of Average Profit for Four Years
Average Profit of four years is taken to compute the value of goodwill of the firm. This is because Average Profit of four years is more than the Average Profit of five years.
Page No 3.19:
Question 11:
Calculation of Average Profit for Five Years
Calculation of Average Profit for Four Years
Average Profit of four years is taken to compute the value of goodwill of the firm. This is because Average Profit of four years is more than the Average Profit of five years.
Answer:
Year |
Profit before Partners’ Remuneration |
– |
Partners’ Remuneration |
= |
Profit after Partners’ Remuneration |
2007-08 |
2,00,000 |
– |
90,000 |
= |
1,10,000 |
2008-09 |
2,30,000 |
– |
90,000 |
= |
1,40,000 |
2009-10 |
2,50,000 |
– |
90,000 |
= |
1,60,000 |
Year |
Profit |
× |
Weight |
= |
Product |
2007-08 |
1,10,000 |
× |
1 |
= |
1,10,000 |
2008-09 |
1,40,000 |
× |
2 |
= |
2,80,000 |
2009-10 |
1,60,000 |
× |
3 |
= |
4,80,000 |
|
Total |
|
6 |
|
8,70,000 |
|
|
|
|
|
|
Page No 3.19:
Question 12:
Year |
Profit before Partners’ Remuneration |
– |
Partners’ Remuneration |
= |
Profit after Partners’ Remuneration |
2007-08 |
2,00,000 |
– |
90,000 |
= |
1,10,000 |
2008-09 |
2,30,000 |
– |
90,000 |
= |
1,40,000 |
2009-10 |
2,50,000 |
– |
90,000 |
= |
1,60,000 |
Year |
Profit |
× |
Weight |
= |
Product |
2007-08 |
1,10,000 |
× |
1 |
= |
1,10,000 |
2008-09 |
1,40,000 |
× |
2 |
= |
2,80,000 |
2009-10 |
1,60,000 |
× |
3 |
= |
4,80,000 |
|
Total |
|
6 |
|
8,70,000 |
|
|
|
|
|
|
Answer:
Number of years’ purchase = 3
Page No 3.19:
Question 13:
Number of years’ purchase = 3
Answer:
Number of years’ purchase = 2
Page No 3.20:
Question 14:
Number of years’ purchase = 2
Answer:
Number of years’ purchase = 2
Page No 3.20:
Question 15:
Number of years’ purchase = 2
Answer:
Capital Employed = Total Assets − Creditors
= 75,000 − 5,000 = Rs 70,000
Goodwill of the firm = Rs 24,000
Number of years’ purchase = 4
Or, 24,000 = Super Profit × 4
Page No 3.20:
Question 16:
Capital Employed = Total Assets − Creditors
= 75,000 − 5,000 = Rs 70,000
Goodwill of the firm = Rs 24,000
Number of years’ purchase = 4
Or, 24,000 = Super Profit × 4
Answer:
Year |
Profit before Partners’ Remuneration |
– |
Partners’ Remuneration |
= |
Actual Profit after Remuneration |
2013–14 |
1,70,000 |
– |
1,00,000 |
= |
70,000 |
2014–15 |
2,00,000 |
– |
1,00,000 |
= |
1,00,000 |
2015–16 |
2,30,000 |
– |
1,00,000 |
= |
1,30,000 |
Number of years’ purchase = 2
Page No 3.20:
Question 17:
Year |
Profit before Partners’ Remuneration |
– |
Partners’ Remuneration |
= |
Actual Profit after Remuneration |
2013–14 |
1,70,000 |
– |
1,00,000 |
= |
70,000 |
2014–15 |
2,00,000 |
– |
1,00,000 |
= |
1,00,000 |
2015–16 |
2,30,000 |
– |
1,00,000 |
= |
1,30,000 |
Number of years’ purchase = 2
Answer:
Number of years’ purchase = 3
Page No 3.20:
Question 18:
Number of years’ purchase = 3
Answer:
Number of years’ purchase = 4
Page No 3.20:
Question 19:
Number of years’ purchase = 4
Answer:
Page No 3.20:
Question 20:
Answer:
Page No 3.20:
Question 21:
Answer:
Page No 3.20:
Question 22:
Answer:
Capital Employed = Total Tangible Assets – Outside Liabilities
Capital Employed = 28,00,000 – 8,00,000 = Rs 20,00,000
Average Profit = Rs 3,00,000
Super Profit= Average Profit– Normal Profit
Super Profit= 3,00,000 – 2,00,000 = 1,00,000
Page No 3.21:
Question 23:
Capital Employed = Total Tangible Assets – Outside Liabilities
Capital Employed = 28,00,000 – 8,00,000 = Rs 20,00,000
Average Profit = Rs 3,00,000
Super Profit= Average Profit– Normal Profit
Super Profit= 3,00,000 – 2,00,000 = 1,00,000
Answer:
(i) Calculation of goodwill through Super Profit Method:
Normal Rate of Return = 10%
Average Capital Employed = Rs 10,00,000
Super Profit = Average Profit – Normal Profit
Super Profit = 1,50,000 – 1,00,000 = Rs 50,000
Goodwill = Super Profit × No. of Years’ Purchase
Goodwill = 50,000 × 2 = Rs 1,00,000
(ii) Calculation of goodwill through Capitalisation of Super Profit Method:
Page No 3.21:
Question 24:
(i) Calculation of goodwill through Super Profit Method:
Normal Rate of Return = 10%
Average Capital Employed = Rs 10,00,000
Super Profit = Average Profit – Normal Profit
Super Profit = 1,50,000 – 1,00,000 = Rs 50,000
Goodwill = Super Profit × No. of Years’ Purchase
Goodwill = 50,000 × 2 = Rs 1,00,000
(ii) Calculation of goodwill through Capitalisation of Super Profit Method:
Answer:
(i) Calculation of Goodwill by Capitalisation of Super Profit Method
Profit of the firm = Rs 5,00,000
(ii) Calculation of Goodwill by Capitalisation of Average Profit Method
Page No 3.21:
Question 25:
(i) Calculation of Goodwill by Capitalisation of Super Profit Method
Profit of the firm = Rs 5,00,000
(ii) Calculation of Goodwill by Capitalisation of Average Profit Method
Answer:
(i) Calculation of goodwill through Capitalisation Method:
Goodwill = 22,50,000 – 15,00,00 = Rs 7,50,000
(ii) Calculation of goodwill through Super Profit Method:
Super Profit = Average Profit – Normal Profit
Super Profit = 4,50,000 – 3,00,000 = Rs 1,50,000
Goodwill = Super Profit × No. of Years’ purchase
Good will = 1,50,000 × 2 = 3,00,000
Page No 3.21:
Question 26:
(i) Calculation of goodwill through Capitalisation Method:
Goodwill = 22,50,000 – 15,00,00 = Rs 7,50,000
(ii) Calculation of goodwill through Super Profit Method:
Super Profit = Average Profit – Normal Profit
Super Profit = 4,50,000 – 3,00,000 = Rs 1,50,000
Goodwill = Super Profit × No. of Years’ purchase
Good will = 1,50,000 × 2 = 3,00,000
Answer:
(i) Calculation of goodwill at three years’ purchase of average profit:
Goodwill = Actual Average Profit × No. of Years’ Purchase
(ii) Calculation of goodwill at three years’ purchase of super profit:
Super Profit = Average Profit – Normal Profit
Super Profit = 1,35,000 – 1,12,500 = Rs 22,500
Goodwill = Super Profit × No. of Years’ Purchase
Goodwill = 22,500 × 3 = 67,500
(iii) Calculation of goodwill on the basis of Capitalisation of Super Profit:
(iv) Calculation of goodwill on the basis of Capitalisation of Average Profit:
Net Assets = Total Assets (excluding goodwill) – Outsider’s Liabilities
Net Assets = 9,00,000 – 75,000 = Rs 8,25,000
Goodwill = Capitalised Value of the Firm – Net Assets
Goodwill = 9,00,000 – 8,25,000 = Rs 75,000
Page No 3.21:
Question 27:
(i) Calculation of goodwill at three years’ purchase of average profit:
Goodwill = Actual Average Profit × No. of Years’ Purchase
(ii) Calculation of goodwill at three years’ purchase of super profit:
Super Profit = Average Profit – Normal Profit
Super Profit = 1,35,000 – 1,12,500 = Rs 22,500
Goodwill = Super Profit × No. of Years’ Purchase
Goodwill = 22,500 × 3 = 67,500
(iii) Calculation of goodwill on the basis of Capitalisation of Super Profit:
(iv) Calculation of goodwill on the basis of Capitalisation of Average Profit:
Net Assets = Total Assets (excluding goodwill) – Outsider’s Liabilities
Net Assets = 9,00,000 – 75,000 = Rs 8,25,000
Goodwill = Capitalised Value of the Firm – Net Assets
Goodwill = 9,00,000 – 8,25,000 = Rs 75,000
Answer:
Page No 3.21:
Question 28:
Answer:
(i)
(ii)
(iii)
(iv)
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