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TS Grewal Double Entry Book Keeping Class 12 Solutions 2019 Volume 1

Our Class 12 Accountancy TS Grewal Chapter wise Textbook Solutions are easy to understand for preparation and revision. There is good chances of coming these Accountancy Class 12 TS Grewal solutions on CBSE Final exam question papers. So students can go through this solutions to get good marks in examinations. These textbook solutions very helpful for the students in their exams and daily homework. The solutions included are simplified and clear solutions to complex problems.

Questions.

Question 1.  Goodwill is to be valued at three years purchase of four years average profit. Profits for last four years ending on 31st March of the firm were: 2015 3 12,000; 2016 3 18,000; 2017 3 16,000; 2018 3 14,000. Calculate amount of Goodwill.

 Solution: Goodwill = Average profit x number of years purchase

- Total Profit for past given years Average Profit =

Number 12,000+ 18,000 + 16,000+ 14,000 +60,000 /5

= 15,000 Number of Years purchase = 3 ..

 Goodwill = 15,000x3 = 345,000.

Question 2. The profit for the five years ending on 31st March, are as follows: Year 2014 3 4,00,000; Year 2015 73,98,000; Year 2016 * 4,50,000; Year 2017 4.45,000; Year 2018 75,00,000. Calculate goodwill of the firm on the basis of 4 years purchase of 5 years average profit. Solution:

 Solution : Goodwill = Average Profits x Number of Years' Purchase

Total Profits Average Profits = total profit

No of year

Number of Years = 4,00,000 + 3,98,000+ 4,50,000 + 4, 45,000+ 5,00,000

                                                                       5

21, 93,000     =     4,38,600.

       5           

 Goodwill = 4,38,600x 4 = 17,54,400.

Question 4. Calculate the value of firm's goodwill on the basis of one and half years purchase of the average profit of the last three years. The profit for first year was 1,00,000, profit for the second year was twice the profit of the first year and for the third year profit was one and half times of the profit of the second year.

 Solution:

Question5: Purav and purvi are partners in a firm sharing profit and losses in the ratio 2:1 they decide to take parv into partnership for one fourth share on 1st April 2019 for this purpose Goodwill is to be valued at four times the average annual profit of the previous 4 for 5 years whichever is higher  the average profit for Goodwill purpose of the first five years are:

year	14-15	15-16	16-17	17-18	18-19
profit	14000	15500	10000	16000	15000

Calculate the value of goodwill.

Solution:

Question 6:  Anu baby and chetan are partners in a firm sharing profit and losses equally they decided to take deep into partnership from 1st April 2019 for 1/5 share of profit for this purpose Goodwill is to be valued at 100 percent of the average annual profit of the previous 3 or 4 years Which ever is higher the annual profit for the purpose of the Goodwill for the past 4 years were:

31 march 2019	288000
31 march 2018	181800
31 march 2017	187200
31 march 2016	253200

Calculate the value of goodwill.

Solution:

AVERAGE PROFIT METHOD WHEN PAST ADJUSTMENT ARE USED

QUESTION 7: Divya purchase jyoti  business with effect of 1st April 2019 profit shown by Jyoti business  for the  last 3 financial year were:

2016-2017 : 100000 (including an abnormal gain of 12500)

2017-2018:  125000(after charging an abnormal loss of 25000)

2018-2019:   112500(excluding 12500 as insurance premium on firm property-now to be insured)

calculate the value of the firm Goodwill on the basis of two years purchase of the average profit of the last 3 years.

SOLUTION :

QUESTION 8: Abhay Babu and Charu are partners sharing profit and losses equally they agree to admit Daman for equal share of profit for this purpose the value of goodwill is to be calculated on the basis of 4 years purchase of average profit of last five years these profit for the year ended 31 march were:

year	2015	2016	2017	2018	2019
profit	150000	350000	500000	710000	(590000)

On 1 april 2018 a car costing 100000 was purchased and debited to travelling expenses account on which depreciation is to be charged@25 .intreset of 10000 on non trade investment is credit to income for the year ended 31march 2019.

Calculate the value of goodwill after adjusting the above.

Solution:

             

QUESTION 9 :Bharat and bhushan are partner sharing profit in the ratio 3:2 .they decided to admit manu as a partner from 1 april2019 on the following term:

(i)                          Manu will be given 2/5 share of the profit.

(ii)                       Goodwill of the firm will be valued at two years purchase of three years normal average profit of the firm.

Profit of the previous three years ended 31march were :

2019- profit 30000(after debiting loss of stock by fire 40000)

2018- loss 80000( includes voluntary retriment compensation paid 110000)

2017- 110000(profit including a gain profit of 30000 on the sale of fixed asset).

Calculate the value if goodwill.

Solution :

Question 10 : Bhaskar and Pillai are partners sharing profit and losses in the ratio 3 ratio to their admit Kanaka into partnership for one fourth share in profit Kanika brings in her share of goodwill in cash Goodwill for this purpose is to be calculated at 2 years purchase of the average normal profit of past 3 years profit of the last 3 years and 31st March were:

2017-Profit 50000 (including profit on sale of assets rupees 5000)

  2018- loss 20000( including loss by fire 30000)

2019- Profit 70000 (including Insurance claim received 18000 and interest on investment and dividend received 8000)

          

 calculate the value of goodwill also calculate Goodwill brought in by Kanika

 Solution:

Question11. Sumit purchased Amit business on 1st April 2019 Goodwill was decided to be valued at 2 years purchase of average normal profit of last four years the profit for the last 4 years were:

Year ended	31march2016	31march 2017	31march 2018	31march 2018
profit	80000	145000	160000	200000

 Books of account revealed that:

(i) Abnormal loss of 20,000 was debited to profit and loss account for the year ended 31st March 2016

(ii) a fixed assets was sold in the year ended 31st March 2017 and gain profit of 25,000 was credited to profit and loss account

(iii) in the year ended 31st March 2018 Assets of the form was not insured due to oversight insurance premium  not paid was 15000

 calculate the value of goodwill.

SOLUTION:

QUESTION 12:  Geet and meet are partners in a firm they admit jeet into partnership for equal share it was agreed that Goodwill will be valued at three years purchase of average profit of last 5 years profit for the last 5 years were:

YAEAR ENDED	31MARCH2015	31MARCH2016	31MARCH2017	31MARCH2018	31MARC2019H
PROFIT	90000(LOSS)	160000	150000	65000	177000

Books of account of the firm revealed that:

 (I) the firm had gain profit of 50000 from the sale of machinery sold in the year ended 31st March 2016 the gain profit was credited in profit and loss account.

 (II) there were an abnormal loss of 20,000 incurred in the year ended 31st March 2017 because of a machine become obsolete in accident

(III) overhauling cost of second hand machinery purchased on 1st July 2017 amounting to 100000 was debited to repair account depreciation is charged @20 pa on written down value method.

Calculate the value of goodwill.

SOLUTION:

WEIGHTED AVERAGE PROFIT METHOD

 QUESTION 13 : Profit of a firm for the year ended 31st March for the last 5 years were:

YAEAR ENDED	31MARCH2015	31MARCH2016	31MARCH2017	31MARCH2018	31MARC2019H
PROFIT	20000	24000	30000	25000	18000

calculate the value of goodwill on the basis of 3 years purchase of weighted average profit after assigning weights 1, 2, 3 ,4 and 5 respectively to the profit for years and date 31st March 2015 2016 ,2017, 2018, and 2019.

SOLUTION: 

QUESTION 14: A and B are partners sharing profit and losses in the ratio of 5 ratio 3 on 1st April 2019 she is admitted to the partnership for one fourth share of profit for this purpose Goodwill is to be valued at two years purchase of last 3 years profit after allowing partners remuneration profit to be wrighted 1,2,3 the greatest weight given to last year's net profit before partner remuneration where 2016 to 2017- 200000; 2017 to 2018- 230000 2018-2019-250000: the remuneration of the partners is estimated to be 90000 per annum calculate the amount of goodwill.

SOLUTION:

QUESTION 15:  Raman and Daman are partners sharing profit in the ratio of 60 40 and for the last four years they have been getting annual salary of 50000 and 40000 respectively the annual account have to on the following net profit before charging partners salary:

 Year ended 31st March 2017- 140000, 2018- 101000, 2019-130000

 on 1st April 2019 Jinu is admitted to the partnership for one fourth sharing profit without any salary Goodwill is to be valued at 4 years purchase of weighted average profit of last three years (after partner salaries) profit to be waited as 1,2,3 the greatest weight been given to the last year

 calculate the value of goodwill

SOLUTION:

WEIGHTED AVERAGE PROFIT METHOD WHEN PAST ADJUSTMENT ARE MADE

QUESTION 16:  calculate Goodwill of a form on the basis of three years purchase of the weighted average profit of the last 4 years the profit for the last four financial year ended 31st March where 2016- 25,000 2017- 27000 2018- 46900 and 2019-53810 the weights assigned to each year are 2016 1 2017-2018 3 2019 for you are supplied the following information:

(i)On 1st April 2016 a major plant repair was undertaken for 10,000 which was charged to revenue just said some is to be capitalised for Goodwill calculation subject to adjustment for depreciation of 10% on reducing balance method

(ii) the closing stock for the year ended 31st March 2017 and 2018 was overvalued by 1000 and 2000 respectively

(iii)to cover management cost an annual charge of 5000 should be made for the purpose of goodwill valuation.

SOLUTION:

QUESTION 7: Dinesh and Mahesh are partners sharing profit and losses in the ratio of 3 ratio to their admit Ramesh into partnership for one fourth share in profit Ramesh bring in his share of goodwill in cash Goodwill for the purpose shall be calculated that two years purchase of the weighted average normal profit of past 3 years weighted being assigned to each year 2017 1 2018 to 2019 3 profit of the last 3 years were:

 2017- profit 50000 (including profit on sale of Rs 5000)

 2018- loss 20000 (including loss by fire 35000)

 2019- profit 70000 (including Insurance claim received 18000 and interest on investment and dividend received 8000)

 calculate the value of goodwill also calculate the Goodwill brought in by Ramesh

SOLUTION: 

QUESTION 18: manbir and nimrat are partners and the admit and hunt into partnership it was it to value Goodwill at 3 years purchase on weighted average profit method taking profit of last 5 years weight assigned to each year as 1 2 3 4 and 5 respectively to profit for the year ended 31st March 2015 to 2019 the profit for this year's where 70000 140000 100000 160000 165000 respectively

 security of book of accounts revealed following information

 (I)there was an abnormal loss of 20000 in the year ended 31st March 2015 

(II)there was an abnormal gain profit of 30,000 in the year ended 31st March 2016 .

(III)closing stock as on 31st March 2018 was overvalued by 10000

 calculate the value of goodwill.

SOLUTION:

QUESTION19: Mahesh and Suresh are partners and they admit Naresh into partnership they agreed to value the Goodwill at 3 years purchase on weight average Profit method taking profit for the last 5 years they assigned weights from 125 beginning from the earliest year and onwards the profit for the last 5 years were as follows:

YEAR	31MARCH	31MARCH	31MARCH	31MARCH	31MARCH
PROFIT	125000	140000	120000	55000	257000

scrutiny books of account Revealed the following:

(i)A second hand machine was purchased for 500000 On 1st July 2017 and 1 lakh 

Spend to make it operational 100000 were wrongly debited to repair account machine is depreciated at the rate 20% per annum on written down value method.

(ii) Closing stock as on 31st March 2018 was undervalued by 50,000

(iii) Remuneration to profit was to be considered as charge against profit and remuneration of 20,000 per annum for each partner was considered appropriate.

 calculate the value of goodwill.

SOLUTION:

QUESTION20: Calculate the Goodwill of a firm on the basis of three years purchase of the weighted average profit of the last four years the appropriate weight to be used and profit are:

YEAR	2015-2016	2016-2017	2017-2018	2018-2019
PROFIT	101000	124000	100000	140000
WEIGHT	1	2	3	4

On a scruity Of the accounts the following matters are revealed:

(I) on 1st December 2017 a major repair was made in respect of the plant increasing 30,000 which was charged to revenue the said some is agreed to be capitalised for Goodwill calculation subjects to adjustment of depreciation of 10% per annum on reducing balance method

(II) the closing stock for the year 2016 to 2017 was overvalued by 12000

 (III)to cover management cost and energy charge of 24000 should be made for the purpose of goodwill valuation

 (IV)on 1st April 2016 a machine having a book value of 10000 was sold for 11000 but the proceeds were wrongly credited to profit and loss account no that has been given to rectify the same depreciation is charged on machinery @ 10% per annum on reducing balance method

SOLUTION :

SUPER PROFIT METHOD

 QUESTION 21: Average profit earned by a form is 80000 which includes and evaluation of stock of 8000 on an average base is the capital investment in the business it's 800000 and the normal rate of return is 8% calculate Goodwill of the firm on the basis of seven times of the super profit

SOLUTION: 

 QUESTION 22 : Gupta and bose had a form in which they had invest 50000 on the average the profit were 16000 the normal rate of return in the industry is 15% Goodwill is to be valued at four years purchase of property in excess of profit @ 15% on the money invested calculate the value of goodwill.

SOLUTION:  

QUESTION 23: The total capital of the form of Sakshi Mehak and Meghna is 100000 and the market rate of interest is 15% the net profit of the last 3 years where 30,000 36000 42000 Goodwill is to be valued at 2 years purchase of the last 3 years super profit calculate the Goodwill of the firm.

SOLUTION: 

QUESTION 24:  Rakesh and Ashok earned a profit of 5,000 they employed capital of 25000 in the form it is expected that the normal rate of return is 15% of the capital calculate amount of goodwill if Goodwill is valued at 3 years purchase of super profit

SOLUTION: 

QUESTION 25:  average net profit expected in future by xyz is 36000 four-year average capital employed in the business by the form is 2 lakh the normal rate of return from capital invested in the class of business is 10% remuneration of partners is estimated to be 6000 per annum calculate the value of goodwill on the basis of 2 years purchase of super profit

SOLUTION:

QUESTION 26:  a partnership form and net profit during the last 3 years and date 31st March as follows 2017- 17000 2018 -20000 2019- 23000

 the capital investment in the form throughout the above mentioned period has been 80000 having regard to the risk involved 15% is considered to be fair return of capital calculate value of goodwill on the basis of two years purchase of average super profit and during the above mentioned three years.

SOLUTION:

QUESTION 27:  partnership firm and net profit during the past three years as follows:

YEAR ENDED	31MARCH2019	31MARCH2018	31MARCH
NET PROFIT	230000	200000	170000

capital investment in the form throughout the above-mentioned period has been 400000 having regard to the risk involved 15% is considered to be fair return of on the capital the remuneration of the partners during the period is estimated to be 1 lakh per annum

 calculate value of goodwill on the basis of two years purchase of average super profit and during the above mentioned three years.

SOLUTION:

QUESTION 28:  ideal market and an average profit of 400000 during the last 5 years normal rate of return on the capital employed is 10% balance sheet of the form as at 31st March 2019 was as follows:

LIABILITIES	AMOUNT	ASSETS	AMOUNT
CAPITAL SHYAM         500000 SUNDER       500000 CURRENTA/C SHYAM         200000 SUNDER       200000 RESERVES SUNDRY CREDITORS BILL PAYABLE OUTSTANDING EXPENSES	1000000 400000 340000 400000 100000 60000	LAND AND BULIDING FURNITURE INVESTMENT SUNDRY DEBTOR BILL RECEIVABLE CLOSING STOCK CASH IN HAND CASH AT BANK	1000000 200000 100000 500000 50000 300000 50000 100000

 calculate the value of goodwill if it is valued at 3 years purchase of super profit

SOLUTION:.

QUESTION 29:  Varun I am Karuna are partners for equity shares they admit letter into partnership for one fourth share it was agreed to value Goodwill of the form at 4 years purchase of super profit normal rate of return is 15% of the capital employed average weight of the form is 4 lakh balance sheet of the form as at 31st March 2019 was as follows

calculate the value of goodwill

SOLUTION:

QUESTION30:  a business at an average profit of 800000 during the last few years the normal rate of return in the similar type of business is 10% the total value of Assets and liability of the business with 22 lacs and 560006 actively calculate the value of goodwill of the form by super profit method if it is valued at 200 half years purchase of super profit

SOLUTION:

QUESTION31: Capital of the form of Sharma and Verma is 2 lakh and the market rate of interest is 15% annual salary to partners is 12000 each the profit for the last 3 years where 60070 2018 4000 Goodwill is to be valued at 2 years purchase of last 3 years average super profit calculate the Goodwill of the firm

SOLUTION:

QUESTION32: supreeth and Shubham are equal partners they decided to admit Aakriti for one third share for this purpose the admission of Akriti Goodwill of the firm is valued at 4 years purchase of super profit average capital employed in the form is 150000 normal rate of return may be taken as 15% per annum average profit of the form 40000 calculate value of goodwill

SOLUTION:

QUESTION 33:  on 1st April 2019 an existing form had a set of 75000 including Cash 5000 which creditors amounted to 5000 on that date the form had a reverse of 10,000 while partners capital account soda balance of 60000 if normal rate of return is 20% and Goodwill of the firm is valued at 24000 at 4 years purchase of super profit find average profit for your of the existing firm 

SOLUTION:

 QUESTION34:average profit earned by a firm is 100000 which includes undervaluation of stock of 40000 of an average basis the capital invested in the business is 630000 and the normal rate of return is 5% calculate Goodwill of the form on the basis of 5 times the super profit

SOLUTION:

QUESTION35: average profit earned by a firm is 750000 which includes over valuation of stock of 30,000 on an average basis the capital invested in the business is 42 lakh and the normal rate of return is 15% calculate Goodwill of the firm on the basis of three times the super profit

SOLUTION:

QUESTION36: Ayub and amit partners in a firm and they admitted just fall into partnership 1st April 2019 they agreed to value Goodwill at 3 years purchase of super profit method for which they decided to average profit of last five years the profit for the last 5 years there

 YEAR ENDED

 31st March 2015           150000         

 31st March 2016           180000

31st March 2017            100000 (including abnormal loss of 1 lakh)

 31st March 2018           260000 (ncluding normal gain profit of 40000)

 31st March 2019           240000

 the firm has total Assets of 2000000 and Outside liability of 500000 on that date normal rate of return is similar business is 10%

calculate value of goodwill

SOLUTION:

CAPITALISATION METHOD

QUESTION37:  from the following information calculate value of goodwill of the firm by applying capitalisation method total capital of the Form 16 00000

Normal rate of return 10% profit for the year 2 lakh

SOLUTION:

 QUESTION38:business has earned average profit of 1 lakh during the last few years find out the value of goodwill by capitalisation method given that the acid of the business are 10 lakh and external liability are 180000 the normal rate of return is 10%

SOLUTION:

QUESTION39:from the following particulars calculate the value of goodwill by capitalisation of average profit method

(I) profit of last five consecutive years ending 31st March 2019 -54000 2018-40 2000-2017 39000 2016 -67000 2015 -59000

 (II)capitalisation rate 20%

 (III0net assets of the form  2 lakh

SOLUTION:

 QUESTION40:a business has earned average profit of 400000 during the last few years and the normal rate of return is similar business is 10% find value of goodwill by

  (I)Capitalisation of super profit method and

 (II)super profit method if the Goodwill is valued at 3 years purchase of super profit

SOLUTION:

  QUESTION41:A firm earn profit 500000 normal rate of  return in a similar type of business is 10% the value of total assets excluding goodwill and the total outside reliability as on the date of goodwill are 55 lakh and 14 lakh respectively calculate value of goodwill according to capitalisation of super profit method as well as capitalisation of average profit method

SOLUTION:

QUESTION42: on 1st April 2018 of form had Assets of 100000 excluding stop of 20,000 the current liabilities 10,000 and the balance constituted partners capital account if the normal rate of return is 8% the Goodwill of the firm is valued of 60000 at 4 years purchase of super profit find the actual profit of the firm

SOLUTION:

CAPITALISATION OF SUPER PROFIT

QUESTION43: average profit of the firm is 2 lakh total Assets of the firm are 15 lakh where as partners capital is 12 lacs if normal rate of return is similar business is 10% of the capital employed what is the value of goodwill by capitalisation of super profit

SOLUTION:

QUESTION44: Rajan and Rajni are partners in a firm their capitals 300000 Rajini 200000 during the year 2018 to 2019 the firm earned a profit of 150000 calculate the value of goodwill of the form by capitalisation of super profit assuming that the normal rate of return is 20%

SOLUTION:

 QUESTION45:average profit of GS and Co is 50000 per year average capital employed in the business is 300000 if the normal rate of return on capital employed is 10% calculate Goodwill of the firm by

(I) super profit method at 3 years purchase

 (II)capitalisation of super profit method

SOLUTION:

QUESTION46: a business has an average profit of 400000 during the last few years and the normal profit of Return In similar business is 10% find the value of goodwill by

(I) capitalisation of super profit method and

(II) super profit method if the Goodwill is valued at 3 years purchase of super profit

 asset of the business  where 4000000 and its external liability 720000

SOLUTION:

 QUESTION47:Ajith and Baljeet are partners in a firm their capitals are 900000 and 600000 respectively during the year ended 31st March 2019 the firm and a profit of 450000 assuming that the normal rate of return is is 20% calculate value of goodwill of the form

(I) by capitalisation method and

(II) by super profit method if the Goodwill is valued at 2 years purchase of super profit

SOLUTION:

QUESTION48:from the following Information calculate value of goodwill of the firm

 at 3 years purchase of average profit

 at 3 years purchase of super profit

 on the basis of capitalisation of super profit

 on the basis of capitalisation of average profit

 Information

( a) average capital employed is 600000

(B) net profit loss of the form for the last 3 years and date are 31st March 2018 200000 31st                 March 2017 180000 31st March 2016 160000

(C) normal rate of return in similar business is 10%

(D) remuneration of 100000 to partners is to be taken as charged against

 (E)Assets of the form excluding Goodwill 50s Assets and non trade investment is 700000 whereas partners capital is 600000 and outside liabilities 100000.

SOLUTION: