G D GOENKA PUBLIC SCHOOL | Sector 48,
Gurugram
WORKSHEET1- INTRODUCTION TO GOODWILL | 2024-2025
CLASS –XII SUBJECT – ACCOUNTANCY
Q X sold his business to Y. Calculate the value of Goodwill 4
1 taking into consideration the following factors:
(i) Goodwill is valued at three years’ purchase of the average
profits of the last four years. Profits of the last four years
were as : 2018- 40,000; 2019- 58,000; 2020- 53,000 and
2021- 62,000.23
(ii)Abnormal loss of 2,000 due to theft has reduced the
profits of the year 2018.
(ii)Profits for the year 2019 include an abnormal gain of
4,000.
(iii)A speculative and lottery profit of 5,000 was received
during the year 2020 which was included in that year’s
profit.
(iv)Profits of the year 2021 were reduced by 10,000
on such machinery which was destroyed by fire
during the year.
( Gw- 1,62,000)
Q A,B and C are partners sharing profits and losses equally. 3
They agree
2 to admit D for equal share. For this purpose, goodwill is to be
valued at
3 years purchase of average profits of last 5 years which
were as
follows:
Year ended on 31st March Rs.
2017 60,000
2018 1,50,000
2019 20,000 (Loss)
2020 2,00,000
2021 1,85,000
On 1st October, 2020 a computer costing 40,000 was
purchased and
debited to Office expenses account on which depreciation is
to be
charged @ 25% p.a. Calculate the value of goodwill.
(Gw- 3,66,000)
Q Following information is available about the business 3
3 of a firm: (i) Profits : 2018 40,000
2019 50,000
2020 60,000
(ii)Non-recurring income of 4,000 is included in the profis of
2019.
(iii)Profits of 2018 have been reduced by 6,000 because
of goods destroyed by fire
(iv)Goods have not been insured but it is thought to
insure them in future. The insurance premium is
estimated at 400 per year
(v) Remuneration of partners of the business is 6,000 per
year, but it has not been taken into account for calculation
of above mentioned rofits.
(vi)Profits of 2020 include income on investment.
Calculate goodwill at two years’ purchase of average profits
of the past three years. (Gw=
88,534)
Q The average net profits expected in the future by ABC firm 3
4 are 1,00,000 per [Link] average capital employed in the
business by the firm is 5,00,000. The rate of interest
expected from capital invested in this class of business is
15%. The remuneration of the partners is estimated to be
10,000 p.a. Find out the value of Goodwill on the basis of
two years' purchase of super profits.
(Gw = 30,000)
Q The net assets of a firm as on 31st march, 2020 were 3
5 4,00,000. If the normal rate of return is 20% and the
goodwill of the firm is valued at 1,25,000 at 5 years’
purchase of super profits, find the average profits of the
firm.
( Avg profits=
1,05,000)
Q On 1st April, 2020, an existing firm had assets of 5,00,000 3
6 including cash of 20,000. The firm had a reserve fund of
90,000, partners' capital accounts showed a balance of
3,80,000 and creditors amounted to 30,000. If the normal
rate of return is 20% and the goodwill of the firm is valued at
64,000 at 4 year’s purchase of super profits, find the
average profits of the firm.
( Avg Profits= 1,10,000)
Q The average profit of a frm is 48,000. The total assets of 3
7 the firm are 8,00,000. Value of other liabilities is 5,00,000
Average rate of return in the same business is 12%.
Calculate goodwill from capitalisation of average profits
method.
(Gw= 1,00,000)