Question

Asha and Usha are equal partners in a firm. The profit and losses of last 6 years are as follows: YEAR AMOUNT (Rs.) 2014 88000 (Profit) 2015 63000 (Loss) 2016 21000 (Loss) 2017 178000 (Profit) 2018 192000 (Profit) 2019 238000 (Profit) Calculate goodwill of the firm at 3 years purchase of average profit of last 6 years. If Lata is admitted as new partner for 4th share in the firm, how much goodwill amount should be brought by Lata?​

Answer 1

Answer:

PROFIT AND LOSS APPROPRIATION ACCOUNT

Particulars Amount Particulars Amount

To Interest on capital

(32,000*5/8) 20000 By net profit 32000

To salary(32,000*3/8) 12000

Total 32,000 Total 32,000

Interest on Anshul's capital = 8,00,000*5%= 40,000

Salary to Asha = 2000*12=24,000

As profit available is less than the appropriation to be made, the appropriation are to be made in the ratio of interest on capital and salary i.e 40,000:24000 = 5:3

Explanation:

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