Question

.A ,B and C are partners in a firm. Their profit sharing ratio is 2:2:1. C is guaranteed a minimum of 1,00,000 Rs. share of profit every year. Any deficiency arising shall be met by A and B equally. The profit for the year ending 31st March 2019 was Rs.4,00,000. Show the appropriation of profit among the partner.​

Answer 1

Solution :

Goodwill = Average Profit × Number of year's Purchases

★ Average profit =

\sf{\longrightarrow{\dfrac{Total \: Profit \: for \: past \: given \: years}{Number \: of \: years}}}⟶

Numberofyears

TotalProfitforpastgivenyears

\sf{\longrightarrow{\dfrac{96,000 \: + \: 14,400\: + \: 20,000 \: + 6,000 \: + \: 10,000}{5}}}⟶

5

96,000+14,400+20,000+6,000+10,000

\sf{\longrightarrow{\dfrac{1,46,400}{5} = 29,280}}⟶

5

1,46,400

=29,280

\longrightarrow⟶ 29,280

Average profit = 29,280

Goodwill = Average Profit × Number of year's Purchases

Number of years Purchases = 3 years

Goodwill = 29,280 × 3

\longrightarrow⟶ 87,840

Goodwill = 87,840

Therefore, The Value of