Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Admission of a Partner

Question:
"Theassets of the business were of Rs 10,00,000 and it's external Liabilities of Rs 2,50,000. The normal rate of return for same business is 10%. Normal Profit would be -"
Options:
1,00,000
7,50,000
1,25,000
75,000
Correct Answer:
75,000
Explanation:
"Capital Employed = Total Assets - External Liabilities
= 10,00,000 - 2,50,000
= 7,50,000
NP = Capital Employed * NRR
= 7,50,000 * 10%
= 75,000"