1. Calculate the value of goodwill of the firm from the following information. The present average net profit of Ram and Shyam’s Partnership firm before deducting partner’s remuneration is Rs. 18000. The total remuneration of the partners is estimated to be Rs. 4000 p.a. The capital employed in the business by the partners: Ram – Rs. 60000, Shyam – Rs. 40000. The profit expected from the total capital invested is 10% p.a. Goodwill is to be valued at 2 years purchase of Super profit. (oct. 04) [Ans. Rs. 8000]
2. Ms. Madhuri Narkar is carrying on the business of readymade garments. She keeps her books of accounts on single entry system. The following information is available from her records.
| Particulars | Balance as on 1-4-09 | Balance as on 31-3-2010 |
| Premises Furniture and fixtures Motor vehicles Stock in trade Sundry debtors Bills receivable Sundry creditors Bank overdraft Bills payable 12% investments Cash at bank Cash in hand | 100000 46000 60000 20000 25000 10000 35000 15000 6500 40000 28000 12000 | 100000 60000 60000 44000 40000 14000 32000 20000 7000 40000 42000 24000 |
Additional information
1. Depreciate furniture and fixtures @ 10% p.a. and motor vehicles @ 15% p.a. Addition to furniture and fixtures was made on 1st January, 2010.
2. Ms. Madhuri Narkar sold her private land at her native place for Rs. 30000 and proceeds were invested into the business.
3. Reserve for Bad and Doubtful Debts is to be maintained @ 5% on sundry debtors.
4. She had withdrawn cash Rs. 15000 and goods worth Rs. 30000 for her private use during the accounting year 2009 – 10.
5. Closing stock of goods has been undervalued by 12% while sundry creditors have been overvalued by 25%.
6. Prepare opening and closing statement of affairs and statements of profit or loss for the year ended 31st march, 2010.
[Ans. Capital at the beginning of the year Rs. 284500, Capital at the end of the year Rs. 365000 and net profit is Rs. 96750]
3. M/s J.K. Company, Maroda, purchased machinery for Rs. 80,000 on 1st April 2002. Company purchased additional machinery for Rs. 36,000 on 1st October, 2003. The company charges depreciation @10% p.a. on the original cost. The financial year of the Company ends on 31st March every year. On 30th September, 2004 a part of the machinery, original cost of which was Rs. 30,000 on 1st April, 2002 was sold by the Company for Rs. 22,000. Prepare Machinery account for 3 years and give journal entries for the year 2002 – 2003.
[Ans. Depreciation is Rs. 8000, Rs. 9800, Rs. 10100, Loss is Rs. 500, Balance is Rs. 65600]
1. The firm’s average profit before charging partners remuneration was Rs. 25000. Total investment of the partners in a firm was Rs. 80000. Rate of return in similar business was 20%. Partners remuneration was Rs. 5000. Goodwill to be valued at two years purchase of super profit. Find out value of goodwill. (oct. 05) [Ans. is Rs. 8000]
2. M/s Jalaram Mill, Mulund, showed a debit balance of Rs. 32,000 to the Machinery A/c on 1st April, 2001(Original cost of the Machinery was Rs. 40,000). On 1st October, 2001 the Mill bought additional Machinery for Rs. 15,000 and spent Rs. 1,000 for its installation. One more machinery costing Rs. 20,000 was purchased on 31st March, 2003. Depreciation is charged on 31st March, every year at 10% p.a. under the Diminishing Balanced Method. On 31st March, 2004, the machinery which was purchased on 1st October, 2001 was sold for Rs. 12000. Prepare Machinery A/c and Depreciation A/c for the years 2001 – 2001, 2002 – 2003 and 2003 – 2004.
[Ans. Loss on sale of asset is Rs. 312, Balance in machinery account at last is Rs. 41320]
3. Mr. Suryakant maintains books on single entry and who gives you the following information.
| Particulars | 31-3-2006 | 31-3-2007 |
| Cash in hand Cash at bank Stock Sundry debtors Investments Furniture Machinery Sundry creditors Outstanding expenses | 500 2500 20000 25000 20000 10000 25000 10000 3000 | 2000 5000 30000 40000 20000 25000 40000 10000 2000 |
Additional information
1. Mr. Suryakant introduced further capital of Rs. 20000 on 1st July, 2006 and had withdrawn Rs. 10,000 during the year.
2. Interest on capital is allowed at 10% p.a.
3. Additions to furniture and machinery were made on 1st October, 2006
4. Write of deprecation on furniture and machinery at 10% p.a.
5. Create reserve for doubtful debts at 5% on sundry debtors.
6. Prepare: a. Statement of affairs. B. Statement of profit and loss for the year ended 31st March, 2007.
[Ans. Capital at the beginning of the year is Rs. 90000, Capital at the end of the year is Rs. 150000 and net profit is Rs. 32500]
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