Question

6. Shiv and Ram share profits and
losses in the ratio of 2:1. They admit
Vishnu as partner with
1/4th share in profits with a guarantee
that his share of profit shall be at least
Rs.1,00,000. The
net profit of the firm for the year
ending March 31, 2020 was
Rs.3,60,000. Prepare Profit and
Loss Appropriation Account Show
your workings clearly.
plzz send me answer it too urgent frnds​

Answer 1

a) Average profit for five years= [14000+15500+10000+16000+15000]/ 5

= 14100

(b) Average profit for four years= [15000+16000+10000+15500]/ 4

= 14125

(b) > (a). Hence, average profit= 14125

Step 2: Calculation of Goodwill

Goodwill= 14125 * 4

= 56500