SRI VIJAY VIDYALAYA MAT. HR. SEC.

SCHOOL,DPI
SECOND MID TERM TEST AUG-2021, XII-COMM
TIME : 1.30 Hrs ACCOUNTANCY (DT) TOTAL MARKS :50
DATE :18/08/21

I. Answer any six of the following (6x2=12)

1. What is goodwill?

2. What is acquired goodwill?

3. What is super profit?

4 What is normal rate of return?

5 State any two circumstances under which goodwill of a partnership firm is

valued.

6 What is sacrificing ratio?

7 Compute average profit from the following information. 2016: ` 8,000; 2017: `

10,000; 2018: ` 9,000

8 Calculate the value of goodwill at 2 years purchase of average profit when

average profit is 15,000.

II. Answer any six of the following (6x3=18)

9. State any six factors determining goodwill.

10. How is goodwill calculated under the super profits method?

11. What are the adjustments required at the time of admission of a partner?
 12. The following are the profits of a firm in the last five years:
2014: ` 10,000; 2015: ` 11,000; 2016: ` 12,000; 2017: ` 13,000 and 2018: ` 14,000
Calculate the value of goodwill at 2 years purchase of average profit of five years.

13. Find out the value of goodwill at three years purchase of weighted average

profit of last four years.

Year Profit Weight

2015 10,000 1
2016 12,000 2
2017 16,000 3
2018 18,000 4

14. From the following details, calculate the value of goodwill at 2 years purchase of super
profit:

(a) Total assets of a firm are ` 5,00,000

(b) The liabilities of the firm are ` 2,00,000
(c) Normal rate of return in this class of business is 12.5 %.
(d) Average profit of the firm is ` 60,000.

15. Anjali and Nithya arepartners of a firmsharing profitsand losses in the ratioof 5:3. They
admit Pramila on 1.1.2018. On that date, their balance sheet showed accumulated loss of
`40,000 on the asset side of the balance sheet. Give the journal entry to transfer the
accumulated loss on admission.

16.Arul and Anitha are partners sharing profits and losses in the ratio of 4:3. On
31.3.2018, Ajay was admitted as a partner. On the date of admission, the book of the
firm showed a general reserve of ` 42,000. Pass the journal entry to distribute the
general reserve.
 III. Answer any four of the following (4x5=20)
17. From the following information relating to Sridevi enterprises, calculate the value of
goodwill on the basis of 4 years purchase of the average profits of 3 years.
(a) Profits for the years ending 31st December 2016, 2017 and 2018 were `
1,75,000, 1,50,000 and ` 2,00,000 respectively.
(b) A non-recurring income of ` 45,000 is included in the profits of the year
2016.
(c) The closing stock of the year 2017 was overvalued by ` 30,000

18. From the following information, calculate the value of goodwill under annuity
method:
(i) Average profit ` 14,000
(ii) Normal Profit ` 4,000
(iii) Normal rate of return 15%
(iv) Years of purchase of goodwill 5
Present value of ` 1 for 5 years at 15% per annum as per the annuity table
is 3.352

19. From the following information, compute the value of goodwill by capitalising
super profit:
(a) Capital employed is ` 4,00,000
(b) Normal rate of return is 10%
(c) Profit for 2016: ` 62,000; 2017: ` 61,000 and 2018: ` 63,000

20. Calculate the value of goodwill at 5 years purchase of super profit from the
following information:
(a) Capital employed: ` 1,20,000
(b) Normal rate of profit: 20%
(c) Net profit for 5 years:
2014: ` 30,000; 2015: ` 32,000; 2016: ` 35,000; 2017: ` 37,000 and 2018: `
40,000
(d) Fair remuneration to the partners ` 2,800 per annum.

21. Seenu and Siva are partners sharing profits and losses in the ratio of 5:3. In the
view of Kowsalya admission, they decided
(a) To increase the value of building by ` 40,000.
(b) To bring into record investments at ` 10,000, which have not so far been
brought into account.
(c) To decrease the value of machinery by ` 14,000 and furniture by ` 12,000.
(d) To write off sundry creditors by ` 16,000