DK Goel Solutions Q 4 Chapter 2 Change in Profit Sharing Ratio Class 12 CBSE [2023-24]
Step-by-step solution of Question 4, Chapter 2 Change in Profit-Sharing Ratio Among the Existing Partners, DK Goel Class 12 Accountancy 2023-24 for the CBSE Board.
Question 4
X purchased the business of Y from 1st April, 2023. For this purpose goodwill is to be valued at 100% of the average annual profits of the last four years. The profits shown by Y’s business for the last four years were :
- Year ended 31st March, 2020 — Profit ₹ 1,00,000 (after debiting loss of stock by fire ₹ 50,000)
- 2021 — Loss ₹ 1,50,000 (includes voluntary retirement compensation paid ₹ 80,000)
- 2022 — Profit ₹ 1,50,000
- 2023 — Profit ₹ 2,00,000
Verification of books of accounts revealed the following :
- (i) During the year ended 31st March, 2021, a machine got destroyed in accident and ₹ 60,000 was written off as loss in Profit & Loss Account.
- (ii) On 1st July 2021, Two Computers costing ₹ 40,000 each were purchased and were debited to Travelling Expenses Account on which depreciation is to be charged @ 10% p.a. on Straight Line Method.
Calculate the value of goodwill.
Solution
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About this solution
This is Chapter 2 Change in Profit Sharing Ratio of DK Goel For 2024 Examinations.
Written by Vijay Adarsh, teaching commerce since 2003 to Class 11, Class 12, B.Com, CA, CS and CMA students.
We have solved all the practical questions in this book and explained them Step by Step in detail with clear working notes.
Also, we have followed the proper format and workings which are required as per CBSE Guidelines. Just follow our presentation of solutions and score good marks in the Accountancy Board Exam.
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