CBSE Class 12 Accountancy Goodwill Nature And Valuation Worksheet

Read and download free pdf of CBSE Class 12 Accountancy Goodwill Nature And Valuation Worksheet. Students and teachers of Class 12 Accountancy can get free printable Worksheets for Class 12 Accountancy in PDF format prepared as per the latest syllabus and examination pattern in your schools. Standard 12 students should practice questions and answers given here for Accountancy in Grade 12 which will help them to improve your knowledge of all important chapters and its topics. Students should also download free pdf of Class 12 Accountancy Worksheets prepared by school teachers as per the latest NCERT, CBSE, KVS books and syllabus issued this academic year and solve important problems provided here with solutions on daily basis to get more score in school exams and tests

Goodwill Nature And Valuation Class 12 Accountancy Worksheet Pdf

Class 12 Accountancy students should refer to the following printable worksheet in Pdf for Goodwill Nature And Valuation in standard 12. This test paper with questions and answers for Grade 12 Accountancy will be very useful for exams and help you to score good marks

Class 12 Accountancy Worksheet for Goodwill Nature And Valuation

Goodwill: Meaning, Nature... Short & Easy Notes for Board Exam
 
Question 1. What is goodwill? What are its characteristics?
=> Goodwill is good name of reputation of the business. It either than the normal profit.
Following are its characteristics;
(i) It is mirror of the business.
(ii) It is an intangible assets.
(iii) It can be bought and sold.
(iv) it cannot be remain same throughout the year.
(v) It is connected with the business.
 
Question 2. Write the factors affecting the value of goodwill.
=> The factors, which are responsible for change the value of goodwill, are as below;
(i) favourable location help to attract the customers.
(ii) Monopolistic nature of the business, increase the value of goodwill.
(iii) Required amount of capital.
(iv) Trade cycle.
(v) Condition of money market.
(vi) Good industrial relation.
(vii) Research and development work.
(viii) Production of good quality product.
 
Question 3. For what purpose goodwill to be calculated.
=> Following are the some reasons due to which goodwill to be calculated;
(i) when there is change in profit sharing ratio of the partners.
(ii) when you partner admitted.
(iii) when any partner retire from the firm.
(iv) when any partner dies.
(v) when two or more firms are amalgamated.
(vi) when the firm is sold.
(vii) when a firm is convert into a company.
 
Question 4. write the method of valuation of goodwill.
=> There are three method of valuation of goodwill;
(i) Average profit method;
(a) Simple average profit method = Under this method, following steps are to be taken to calculate the amount of goodwill.
Step 1: Calculate the total profit.
Step 2: Calculate average profit. Average profit = Total profit / Number of year
Step 3: Calculate goodwill.
Goodwill = Average profit*Number of year purchase
 
(b) weightage average profit method = Under this method, following steps are to be taken to calculate the amount of goodwill.
Step 1: Profit multiply by their weight.
Step 2: Add all the product.
Step 3: Add all the weight.
Step 4: Compute weightage average profit.
weightage average profit = Sum of product/Sum of weight.
Step 5: Calculate goodwill.
Goodwill = weightage average profit*No of year purchase.
 
(ii) Super profit method;
Step 1: Find-out average profit.
Average profit = Total profit/No of year.
Step 2: Find-out average profit.
Normal profit = Capital employed*Normal rate of return/100.
(Capital employed = Total assets - Total liabilities
or, capital employed = capital+reserve+profit-fictitious assets)
Step 3: Calculate super profit.
Super profit = Average profit-normal profit.
Step 4: Calculate goodwill.
Goodwill = super profit*No of year purchase.
 
(iii) Capitalization method;
(a) Capitalization of average profit method;
Goodwill = Capitalized value - capital employed.
(Capitalized value = Average profit*100/normal rate of return.)
(b) Capitalization of super profit method;
Goodwill = super profit*100/normal rate of return.
 
POINTS;
i. Goodwill is an intangible assets.
ii. As per Accounting Standard 26, only purchased Goodwill will be recorded in the book of accounts.
iii. Goodwill helps in earning higher profit.

 

GOODWILL: NATURE AND VALUATION..................

Question 1. Define Goodwill.

Question 2. List the characteristics of goodwill.

Question 3. Explain the nature of goodwill.

Question 4. Under what circumstances has the goodwill to be valued?

Question 5. List the factors affecting the value of goodwill.

Question 6. What do you understand by purchased goodwill and self generated goodwill?

Question 7. What are the different methods of valuation of goodwill?

Question 8. What is meant by” number of years purchase”?

Question 9. What is meant by :-

(i) Super profit

(ii) Capital employed

(iii) capitalized value of business

(iv) capitalized value of Super profits

Question 10. Distinguish between average profits and super profits.

Question 11. Give the formula for calculating goodwill in each of the following methods:-

(i) Average profit method

(ii) super profit method

(iii) capitalization method

Question 12. Calculate the value of goodwill as on 1st Jan 2007 on the basis of three years’ purchases of average profits of the last five years profits. The p + L for the years were

2001 – 30000 (profit)

2002 – 40000 (loss) 

2003 – 92000 (profit)

2004 – 55000 (profit)

2005 – 70000 (profit)

2006 – 90000(profit)

During 2002 profit on sale of fixed asset amounted to Rs 2000, during 2004 amounted to Rs 5000, and in 2006 loss on sale of fixed asset amounted to Rs 5000. [Ans 1, 59,000]

Question 13. The profits of a firm for the last three years were:-

2001 – 5, 00,000 (including an abnormal gain of Rs 1, 50,000)

2002 – 4, 00,000 (after charging an abnormal loss of Rs 2, 00,000)

2003 – 6, 00,000 (excluding Rs 2, 00,000 payable on the insurance of P + m)

Calculate the value of firms’ goodwill on the bases of four years’ purchases of the average profits of the last three years. [Ans 18, 00,000]

Question 14. On 1st April 2001 an existing firm had assets of Rs 75000 including cash of Rs 5000. The creditors amounted to Rs 5000 on that date. The firm had reserve fund of Rs 10,000 while partner’s capital accounts  showed a balance of Rs 60,000. If the normal rte of return is 20% and the goodwill of the firm is valued at Rs 24,000 at four years’ purchase of super profits, find the average profits per year.[Ans super profit – 6000, av. profit – 20000]

Question 15. Is goodwill an intangible asset or a fictitious asset? Explain.



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