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WorksheetsCh-2 Valuation of Goodwill
Total questions: 17
Worksheet time: 19mins
The average net profits expected of a firm in future are Rs. 68,000 per year and capital invested in the business by the firm is Rs. 3,50,000. The rate of interest expected from capital invested in this class of business is 12%. The remuneration of the partners is estimated to be Rs. 8000 for the year. Calculate the value of goodwill on the basis of two years’ purchase of super profits.
Rs. 18000
Rs. 36000
Rs.54000
None of the above
Average profit earned by a firm is Rs. 75,000 which includes undervaluation of stock of Rs. 5000 on
average basis. The capital invested in the business is Rs. 8,00,000 & the normal rate of return is 8 %.
Calculate goodwill of the firm on the basis of 5 times the Super Profit.
80000
64000
11000
16000
Nature of goodwill is
intangible asset
fictitious asset
long term liability
current asset
Which of the following is/are method(s) of valuation of goodwill ?
Average profit method
super profit method
capitalisation method
All of the above
Which of the following factor(s) affect goodwill
Nature of business
Efficiency of management
Location
All of the above
Find out that goodwill which is accounted for as per Accounting Standard 26
Purchased goodwill only
Self generated goodwill only
both(a) and (b)
Goodwill brought in by a partner
The profits for the last 3 years were- 1st year-4,000 ,IInd year-6,000 and IIIrd year-2,000.Select correct option for goodwill on the basis of 3 years purchase of average profit.
₹ 12,500
₹ 12,000
₹ 13,000
₹ 16,000
Capital employed in the business is ₹ 2,00,000,Normal rate of return(NRR) on capital employed is 15 % .During the year firm earned a profit of ₹ 48,000.Find the correct option if goodwill is 3 years purchase of super profit.
₹ 54,000
₹ 60,000
₹ 50,000
₹ 48,000
A firms earn ₹ 1,20,000 as its annual profits.The normal rate of profit being 10 % .Assets of the firm are ₹ 14,40,000 and liabilities are ₹ 4,40,000.Tick the correct option for goodwill by capitalisation method.
₹ 4,00,000
₹ 2,80,000
₹ 2,00,000
₹ 3,60,000
Average profit of firm is ₹ 3,00,000.total tangible assets in the firm are ₹ 28,00,000 and outside liabilities ₹ 8,00,000.The NRR is 10% of capital employed.calculate goodwill by capitalisation of super profit method.
₹ 14,00,000
₹ 16,00,000
₹ 18,00,000
₹ 10,00,000
Super profit =
Average profit-Normal profit
Normal profit-actual profit
Average Profit-capital employed
None of the above
Goodwill by super profit=
SPxNRR/100
SPx100/AP
SPx No of year purchase
SPx capital employed/100
Capital Employed=
Tangible assets- outside liabilities
Average profit-Tangible assets
Super profit -outside liabilities
None of the above
In case of partnership firms, goodwill is valued at time of
admission of new partner
Retirement or death of partner
change in profit sharing ratio
all of the above
Following are the factors affecting goodwill except_______
Nature of business
Efficiency of management
Technical know-how
Location of the customers
While calculating goodwill, weighted average method should be followed when _______
profits are uneven
profits are with increasing trend
profits are with decreasing trend
Either "b" or "c"
If the NRR is 10% and Super profit is 20,000, calculate the goodwill as per capitalisation of super profits.
20,00,000
2,00,000
20,000
2,000
