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Home Questions FV9CJKGR5H
Target Exam

CUET

Subject

Accountancy

Chapter

Admission of a Partner

Question:

X and Y are partners with capital of ₹440000 and ₹40000. If the firm earned an average profit of ₹90000 and the normal rate of return is 10%. Find out the value of goodwill?

Options:

₹420000

₹480000

₹840000

₹900000

Correct Answer:

₹420000

Explanation:

Capitalised value of business= 90000*100/10 = ₹900000 Capital employed = 440000+ 40000 = ₹480000
GOODWILL= 900000-480000= ₹420000

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