Goodwill MCQs [Set 2]

1) The net profits for the last 3 years were: 2018-19 ₹ 50,000; 2019-20 ₹ 90,000 and 2020-21 ₹ 70,000. On 1st April, 2020, furniture costing ₹ 30,000 was purchased and wrongly debited as Travelling Expenses Account. Depreciation on furniture was to be charged @ 20% p.a. on straight line method. Adjusted average profit will:

2) The net profits for the last 3 years were: 2018-19 ₹ 80,000; 2019-20 ₹ 1,20,000 and 2020-21 ₹ 1,50,000. Included in the profit, there was an abnormal gain of ₹ 20,000 and closing stock was overvalued at ₹ 10,000 in 2019-20. Adjusted average profit will be:

3) Profit of last 3 years were as follows : 2018-19 : 50,000 ; 2019-20 ; 80,000 ; 2020-21 : 1,00,000 Weighted average profit will be (if weight assigned 1,2,3):

4) The net profits for the last 3 years were: 2018-19 ₹ 40,000; 2019-20 ₹ 46,000 and 2020-21 ₹ 52,000. There was an abnormal loss of ₹ 3,000 included in the profit of 2019-20. Adjusted average profit will be:

5) The net profits for the last 3 years were: 2018-19 ₹ 70,000; 2019-20 ₹ 60,000 and 2020-21 ₹ 80,000. There was an abnormal loss of ₹ 15,000 included in the year 2019-20. Profit of the year 2020-21 includes loss on sale of furniture (Furniture whose book value was 10,000 sold for 7,000). Adjusted average profit will be:

6) The net profits for the last 3 years were: 2018-19 ₹ 1,10,000; 2019-20 ₹ 1,20,000 and 2020-21 ₹ 1,30,000-There was an abnormal gain of ₹ 6,000 included in the profit of 2018-19 and profit of the year 2020-21 includes gain on sale furniture (furniture book value 10,000 was sold for 13,000). Adjusted average profit will be:

7) Goodwill of the firm is valued at 3 years purchase of simple average profit of last 4 years. Goodwill was calculated ₹ 1,68,000. Total profit of last four years were:

8) The net profits for the last 3 years were: 2018-19 ₹ 1,80,000; 2019-20 ₹ 1,50,000 and 2020-21 ₹ 2,10,000. Included in the profit, there was an abnormal loss of ₹ 40,000 and closing stock was overvalued by ₹ 10,000 in 2019-20 but it is correctly brought forward in 2020-21. Adjusted average profit will be:

9) The net profits for the last 3 years were: 2018-19 ₹ 1,50,000; 2019-20 ₹ 1,50,000 and 2020-21 ₹ 1,50,000. There was an abnormal loss of ₹ 30,000 in 2019-20 and closing stock is to be undervalued at ₹ 10,000 in 2018-19. Adjusted average profit will be:

10) The net profits for the last 5 years were: 2016-17 ₹1,36,000; 2017-18 ₹1,70,000; 2018-19 ₹ 1,90,000; 2019-20 ₹ 2,00,000 and 2020-21 ₹ 2,49,000. There was an abnormal loss of ₹ 20,000 included in the profit of 2017-18 and an abnormal gain of 10,000 included in the profit of 2019-20. Adjusted average profit will be: