WorksheetsGoodwill
Total questions: 20
Worksheet time: 12mins
Calculate the value of goodwill based on 3 years of purchase of average profit of last 4 years - 30000; 35000; 45000 & 50000
(a)
Weighted average gives more importance to _____ profits and less importance to _____ profits
Oldest; Latest
Latest; Oldest
Oldest; Oldest
Latest; Latest
While calculating goodwill by average profit method then which average is considered if the question is silent
Simple Average
Weighted Average
Any of the above
Geometric Mean
Which of the following is the best tool to measure the goodwill of the business
Making an Inquiry in the Market about the business
Checking out the name fame in google website
Making prediction of the future profitability of business based on past performance
Meta, Instagram, LinkedIn etc popularity
Set of specific instructions has been designed for recording of goodwill/intangible assets. Which Accounting standard deals which it ?
Accounting Standard - 10
Accounting Standard - 25
Accounting Standard - 26
None of the above
One company acquires the another company for Rs. 300 Crores for which worth Rs. 210 Crores of assets were received. What is the amount of Goodwill paid by the business ?
60 Crores
70 Crores
80 Crores
90 Crores
The present value of the firm’s anticipated excess earnings is
capital
Goodwill
FMP
super profits
10. IN WHICH OF THE FOLLOWING CASES,VALUATION OF GOODWILL IS NOT REQUIRED:
PREPARATION OF FINAL ACCOUNTS
SALE OF BUSINESS AS A GOING CONCERN
CHANGE IN PSR
DEATH OF A PARTNER
8.TANGIBLE ASSETS OF THE FIRM ARE RS 14,00,000 AND OUTSIDE LIABILITIES ARE 4,00,000.PROFIT OF THE FIRM IS RS 1,50,000 AND NORMAL RATE OF RETURN IS 10%.THE AMOUNT OF CAPITAL EMPLOYED WILL BE
RS 10,00,000
RS 50,000
RS 2,00,000
7.WHAT KIND OF AN ACCOUNT IS A GOODWILL ACCOUNT?
REAL A/C
NOMINAL A/C
PERSONAL A/C
NOT AN A/C
6.ASSERTION (A) : GOODWILL HAS A VALUE WHICH IS REALISED WHEN BUSINESS IS SOLD.
REASON (R) : GOODWILL IS A FICTITIOUS ASSET SINCE IT IS NORMALLY RELEASED ON SALE OF BUSINESS.
ASSERTION AND REASON ARE CORRECT BUT REASON IS NOT THE CORRECT EXAMINATION OF ASSERTION
ASSERTION(A) AND REASON(R) ARE CORRECT BUT REASON(R) IS THE CORRECT EXAMINATION OF ASSERTION(A)
ASSERTION(A) IS FALSE AND REASON(R) IS TRUE
ASSERTION(A) IS TRUE AND REASON(R)IS FALSE
5.EXCESS OF PROFIT OVER WHAT IS CALLED SUPER PROFIT
ACTUAL,SUPER
SUPER,NORMAL
SUPER ACTUAL
ACTUAL,NORMAL
3.AVERAGE CAPITAL EMPLOYED IN A FIRM IS RS 2,00,000. NORMAL RATE OF RETURN IN THE BUSINESS IS 20% AND THE FIRM'S ARE AVERAGE PROFITS ARE RS 1,60,000. VALUE OF THE GOODWILL BY CAPITALISATION OF SUPER PROFIT METHOD IS
RS - 2,00,000
RS - 4,00,000
RS - 6,00,000
RS - 8,00,000
2.EXCESS AMOUNT THAT A FIRM GETS OVER AND ABOVE THE MARKET VALUE OF ASSETS AT THE TIME OF SALE OF ITS BUSINESS IS
RESERVE
SUPER PROFIT
GOODWILL
PROFIT
1.A BUSINESS WHEREIN DEMAND FOR THE PRODUCTS DEALT IN IS HIGHER THAN SUPPLY,IT WILL LEAD TO LOWER IN CAPITAL REQUIREMENT AND HIGHER PROFIT - WHICH FACTOR OF GOODWILL IS THIS
PAST PERFORMANCE
LONGER ESTABLISHMENT OF BUSINESS
MARKET SITUATION
FAVOURABLE LOCATION
What are super profits
Actual profit – Normal Profit
Normal Profit - Actual profit
Actual profit + Normal Profit
None of the above
Nature of goodwill is
intangible asset
fictitious asset
long term liability
current asset
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
Which of the following factor(s) affect goodwill
Nature of business
Efficiency of management
Location
All of the above
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
