CBSE Class 12 Accountancy sample paper 2024-25: question 18(b)
From the official CBSE sample question paper for 2024-25, section A, question 18(b), for 3 marks. Try it first; the hints and our step-by-step solution are below.
Q18(b) · 3 marks · Short answerReconstitution of a Partnership Firm – Admission of a Partner
Amit and Kartik are partners sharing profits and losses equally. They decided to admit Saurabh for an equal share in the profits. For this purpose, the goodwill of the firm was to be valued at four years' purchase of super profits.
The Balance Sheet of the firm on Saurabh's admission was as follows:
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Capital Accounts: Amit 90,000; Kartik 50,000 | 1,40,000 | Fixed Assets (Tangible) | 75,000 |
| Creditors | 5,000 | Furniture | 15,000 |
| General Reserve | 20,000 | Stock | 30,000 |
| Bills payable | 25,000 | Debtors | 20,000 |
| Cash | 50,000 | ||
| 1,90,000 | 1,90,000 |
The normal rate of return is 12% p.a. Average profit of the firm for the last four years was ₹30,000. Calculate Saurabh’s share of goodwill.
Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2024-25.
Hints
Open one hint at a time and try again before the next.
Hint 1
Reserves belong to the partners, so include them in capital employed.
Hint 2
Super profit = average profit − normal profit.
Hint 3
"Equal share" with three partners means 1/3.
Step-by-step solution
Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.
- 1 mark
Capital employed = capitals ₹ 1,40,000 + general reserve ₹ 20,000 = ₹ 1,60,000 (also total assets ₹ 1,90,000 − creditors ₹ 5,000 − bills payable ₹ 25,000). Normal profit at 12% = ₹ 19,200.
- 1 mark
Super profit = ₹ 30,000 − ₹ 19,200 = ₹ 10,800. Goodwill = 4 × ₹ 10,800 = ₹ 43,200.
- 1 mark
Saurabh gets an equal (1/3) share: ₹ 43,200 × 1/3 = ₹ 14,400.
Answer: Goodwill ₹ 43,200; Saurabh's share ₹ 14,400
Where the marks are
- Capital employed and normal profit (1 mark)
- Super profit and goodwill (1 mark)
- Saurabh's share (1 mark)
Revise the chapter
- Chapter: Reconstitution of a Partnership Firm – Admission of a Partner (notes, formulas, where marks are lost and every past question)
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