List of top Accountancy Questions on Goodwill Valuation

What is hidden goodwill? How is it adjusted on the admission of a partner?
Amrita and Kalyani are partners sharing profits in the ratio of 3 : 2. They decided to expand the business by admitting Suraj as a new partner for 1/4th share. Suraj’s share of goodwill is valued at Rs 90,000 for which he compensated Amrita and Kalyani in the ratio 1 : 4. Following information is also provided:
  • Machinery : Rs 25,00,000
  • Land : Rs 10,00,000
  • Computer : Rs 2,50,000
  • Workmen compensation fund : Rs 5,30,000
Claim against workmen compensation is Rs 2,00,000 and goodwill appeared in the books at Rs 60,000.
Goodwill brought by Suraj will be distributed as:
While calculating Goodwill under super profit method, the sequence is followed as :
(A) Calculation of Super profit
(B) Calculation of Capital Employed
(C) Calculation of Normal profit
(D) Calculation of Average profit
(E) Calculation of Goodwill
Choose the correct answer from the options given below :
Based on the above, answer the question. Amrita and Kalyani are partners sharing profits in the ratio of 3 : 2. They decided to expand the business by admitting Suraj as a new partner for 1/4th share. Suraj’s share of goodwill is valued at Rs 90,000 for which he compensated Amrita and Kalyani in the ratio 1 : 4. Following information is also provided:
  • Machinery : Rs 25,00,000
  • Land : Rs 10,00,000
  • Computer : Rs 2,50,000
  • Workmen compensation fund : Rs 5,30,000
Claim against workmen compensation is Rs 2,00,000 and goodwill appeared in the books at Rs 60,000.
Share of revaluation profit of Amrita and Kalyani is:
If Average Capital Employed in a firm is Rs9,00,000; Average Profits Rs2,80,000 and Normal rate of return is 20%, then value of goodwill as per capitalisation of super profits is :