Q1 (a) Asha, Meenal and Reshmi were partners commencing a business in a remote area of

West Bengal. Their aim was to develop the tribal communities by providing them with

adequate health and education facilities.

On 31st March, 2018 after making the due adjustments for profits and drawings, their

capitals were Asha: Rs. 8,00,000, Meenal: Rs. 6,00,000 and Reshmi: Rs. 4,00,000. The

drawings of the partners were Rs. 8,000 per month, Rs. 6,000 per month and Rs. 4,000

per month respectively. The profit of the firm for the year ended 31st March, 2018 was

Rs. 12,00,000. Subsequently it was found that interest on capital @6% p.a. due had

been omitted.

Showing clearly all the necessary working notes, pass the adjustment entry. Also identify

any two values highlighted in the above question.

(b) Naresh and Mayank have a combined capital of Rs. 4,00,000 and the market rate of

interest in 12%.Annual salary given to the partners is Rs. 10,000 each. The profits for

the last three years were Rs. 64,000, Rs. 90,000 and Rs. 1,10,000. Goodwill is to be

valued:

(i) 2 years purchase of last 3 years average profits.

(ii) 2 years purchase of super profits.

(iii) Capitalization of super profits.

Show the working notes clearly.