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SERIES
  • 7/2/2025
Transcript
00:30Illustration number 10, Anto, Banto and Chinto ABC were in partnership sharing profits
00:41and losses in the ratio of 3 to 4 is to 3.
00:45The accounts of the firm are made up to 31st March every year.
00:51The partnership provided internally are that the retirement of partner, the Goodwill was
00:56to be valued at 3 years purchase of average profit of past 4 years.
01:02So past 4 years would average profit.
01:04After the date of retirement after detecting interest at the rate of 12% per annum on capital
01:09implied and remuneration 2000 per month to each partner.
01:12So if you have a profit, interest and capital and remuneration to partners, we will subtract
01:19the profit.
01:21On 1st April 22, A retired and it was agreed on his retirement to adjust the Goodwill in the
01:30capital accounts without showing any amount of Goodwill in the balance sheet.
01:33It was agreed that the capital implied would be 6 and a half lakhs and B, C where to continue
01:50the partnership, sharing profits and losses equally either new ratio either old ratio.
01:57This is old ratio.
01:58This is new ratio.
01:59After the retirements of A and TOE, the following were the amounts of profits of the earlier
02:05years before charging salary to the partners and interest and capital implied.
02:08You are required to compute the value of Goodwill.
02:11Come on, get the total of this 10,80,000 rupees divided by 4, the average being 2,70,000 rupees.
02:24From there, you have to subtract the interest on capital.
02:38The combined capital being 6 and a half lakhs.
02:40Okay.
02:41The capital implied would be, I hope this is the combined capital.
02:46After 6 and a half lakhs, you can get 12% it's going to be over the net.
02:5278,000 is the interest on capital.
02:56And minus salary, salary being 2,000 per month for 12 months, 24,000 for one partner, for three
03:057,200,000 rupees can be subtracted.
03:10Then the value what you get here is called future maintainable profit or estimated profit,
03:171,20,000 rupees.
03:20And Goodwill is equivalent to, you have to multiply with the number of years of purchase, the number
03:25of years of purchase in this case being 3.
03:27So, 3,60,000 is the Goodwill.
03:32So, you are sacrificing ratio as well as gaining ratio.
03:37What are you doing?
03:38Goodwill to be raised to the, all the partners A, B, C. Okay.
03:44In the old ratio, 3 is to 4 is to 3, 108,000 and 144,000 MRI and 108,000.
04:00Cancel the Goodwill to the continuing partner in new ratio, new ratio being equal 1 is to
04:061,000.
04:07180,000.
04:08180,000.
04:09Rise upon them both, we will credit, cancel upon them both, debit upon them.
04:13The ultimate value A, as he is leaving the organization, he may be the loser or sacrificer.
04:19That's why the sacrificer we will credit upon them.
04:22Who will charge upon them?
04:23Who will gain?
04:24And the gaining extent we will credit upon them.
04:27So, 36,000 debit, give them both, 32,000 debit.
04:33Then the ultimate value being, B account, B's capital account debit, 36,000.
04:41C's capital account debit, 72,000 to A's capital, 108.
04:51I think 1 is to 2 is the gaining ratio and the U.S. sacrifice fund of the 1 share.
04:56Okay.
04:57Clear?
04:59Clear?
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05:29the future maintainable profit, future maintainable profit. The estimated profit for the tomorrow
05:42will be your future maintainable profit and the term Na Na Na Invisman Erpen. So, you
05:47have to watch the videos also, concept videos, previous class name, FM Na Na Invisman Erpen.
05:53You should not have any doubts here, okay, clear? I use only FMP, future maintainable
06:23profit. Clear Net Expanding, we will move on to the next illustration, 11th one is one
06:29of the comprehensive illustrations. Goodwill Calculation even CMA, CA Final
06:36level. Goodwill Calculation even CMA, CA Final level, 60 marks. So, at your inter foundation
06:43level, even at inter level, in school days seems to be very simple illustrations. You can score
06:50three marks or four marks easily. But, other topics, 16 marks are somewhat
06:57a depth below. Right.
06:5911th illustration, 11th illustration, one of the comprehensive one, 11th one.
07:0611th one.
07:1311th one.
07:2011th one.
07:2611th one.
07:2711th one.
07:3311th one.
07:3811th one.
07:4111th one.
07:4611th one.
08:0112th one.
08:0711th one.
08:1012th one.
08:13Now, CU and AU were in partnership sharing profits and losses in the ratio of 5 to 3.
08:32On 1st April 22, they decided to admit AG, the partnership and the following tips.
08:40AG will bring 2 lakhs as capital for one-fourth share.
08:46One-fourth share at the rent lecture will be capital.
08:49New profit sharing ratio shall be 2 is to 1 is to 1 among CU, AU and AG.
08:56So old ratio being 5 is to 3, new ratio being 2 is to 1 is to 1.
09:06CU, the capital is to be capital, which is AG.
09:12AG capital is to be capital for one-fourth share.
09:19Capital being 2 lakhs.
09:22They even information on the net.
09:26CU was entitled, CU, AU, AG.
09:34CU was entitled to salary of 2,000 per month.
09:38It was revised to 3,000.
09:41CU's salary, after some times, it is revised to 3,000 from 1st October 2020.
09:54End of date, Lundu, 1st October 2020, Lundu.
10:01Interest on capital was paid at the rate of 8 percentage.
10:09And capitals on 31st March 22, were 4 lakhs, 3 lakhs, okay.
10:20Which had remained unchanged since last 4 years, capital.
10:25CU's 9 lakhs, A's 3 lakhs, remains unchanged.
10:31Goodwill has to be valued on the basis of 3 years purchase of average adjusted weighted
10:35average profit of past 4 years after deducting salaries to partners and interest on capital.
10:42So, past year's profit predicts for future.
10:50Future predicts for past year's profit, past year's impact, profit change, how can we give importance
11:01that's a very, very important case.
11:07For example, 18, 19, 19, 20, in the period in that period, that salary is 22,000.
11:14If you have 22,000, you have to connect with the profit, you have to be aware of the previous year.
11:20So, that you have to adjust, that you have to adjust, that you have to adjust this.
11:34So, other than the information, this is per month basis, per month basis.
11:39We are going to calculate the profits, 18, 19 and all the years, let us see.
11:58This profit is not correct one.
12:00We are supposed to go for doing some adjustments, Arapatinama Poppa, 18, 19, 18, 19, 19, 19,
12:1620, 20, 21, 21, 22.
12:25The profit they have found out, profit being 2,10,000, 2,60,000, 2,10,000, 3,05,000.
12:47Now, see here, the profits of the previous 4 years, before charging interest and capital
13:15and salary to see you, where as follows.
13:17But, you have to calculate average profit after detecting, salaries as well as interest on capital.
13:22So, what do you want to do is, salaries are deducted by salaries.
13:31Assume that the year end being 31st March, 1st April is the year beginning of the year end,
13:3831st April 2018, 2019, 2020, 2020, 2021, okay.
13:5318, 19, 19, 19, 19, 19, 19, 20, 21, 21, 22.
14:00Year 1, year 2, year 3, year 4.
14:06Therefore, salary revives on 1, 10, 2020, year 1, 10, 2020.
14:13That is 31st March, 2021, salary revives the date, which is one day, 1, 10, 2020.
14:191 10 2020.
14:21That's the 20 salary of the C-U.
14:2524.25.
14:2724.25.
14:2924.25.
14:3135.25.
14:3336.25.
14:35In this period,
14:37the salary of the 2.25.
14:3930.25.
14:41This is the 6.25.
14:436.25.
14:45The salary of the total being 30,000 rupees will be the salary.
14:55So, salary for year 1819 being 24,000, 1920 also 24,000, 2021 being 30,000, 21, 22 being 36,000, should be subtracted, should be subtracted.
15:12That's why interest on capital should also be subtracted.
15:16So, interest on capital on the 4 plus 3, 7,00,000, 8 percentage will be the interest on capital.
15:22So, 7,00,000, 8 percentage putting on, 56,000 rupees will be the interest on capital.
15:28So, that capital remains same for all the 4 years.
15:32So, if it is not all or some, 56,000 rupees interest could be subtracted.
15:37Clear?
15:4156,000 could be subtracted in all these years.
15:47Right.
15:48Apart from that, we have been given some more adjustments.
15:50Here are the adjustments left.
15:53If you need to put a share of goodwill in cash,
15:56Now, I have to incorporate these points.
15:59and cash for goodwillukum kondondararar, having the additional information, cash for goodwillukum.
16:11Now I have to incorporate these points, these profits were subject to the following, rectifications,
16:16previous year, profits, we have to do the rectification, only the adjusted profit will have the impact
16:27really in the future, based on the correct profit only, we have to calculate the future
16:31maintainable profit, rectification pundroo, end and the year le, and the year le, profit
16:36affect a choo, that will be reverse pundroo.
16:39A machine costing 40,000 purchased on 1st October 2020, was wrongly charged to revenue, machine
16:45purchase pundroo, revenue kondil charge pundroo, PNL kondil debit sale pundroo, the machinery
16:50was depreciated at the rate of 20 percentage per annum on return down value method.
16:54machine, machine would have a vertical cost on the 40,000 so null, ithukhi depreciation
17:00on the first, depreciation calculated pundroo, for the year, 31st March 2021 marekkum,
17:08aar masadatakai, ok first to 6 months, ok. 2021 year le, depreciation for 2021.
17:18Āar masadatakai, learner, first October, 10 percentage, putting Scriptures 4,000 will be
17:22the depreciation, am I right. 2021 now at the couple on 36,000 now you have to provide the
17:28depreciation for the year 21, 22, ethukhi 돈 set putings adolescence, 3,200 year, and bronze,
17:29Now you have to provide the deposition for the year 2021-2022, this 10% is putting on 7200 will be the deposition.
17:40Now, if you have to do this, in the first October of 2020, that is the year 2021-2022, you will be able to get the deposition for the year 2021.
18:05So, what is the jail entry here? Machine account debit to cash, expenses to cash, rectification, cash correct, machine to expenses after the final account preparation, P&L adjustment.
18:22So, you are now going to credit that value in this year 2021-2022, 40,000 rupees plus or minus. Machine error.
18:36That is the depreciation. If you have the machine, P&L debit to cash, asset will be the depreciation.
18:43If you have the depreciation, P&L debit to cash, profit will be the depreciation. So, depreciation related item will decrease the profit.
18:51In this year 2021-2022, we will decrease the profit. In this year 2021-2022, we will decrease the profit.
18:58In 2021-2022, we will decrease the profit. So, that we have already calculated.
19:02One asset is an error of principle. One asset is an expensive market.
19:06One asset is an expensive market. In that particular year, profit is very low.
19:09So, the reverse of the profit is an item.
19:11The assets are considered to be the depreciation, P&L debit.
19:15The depreciation reduces the profit. That is the depreciation.
19:21When it is related for the assets and depreciation, always keep that idea in your mind.
19:27Will have the impact in the capital item as well as will have the impact related to the depreciation over the continuing period.
19:33A adjustment. B adjustment. Stock on 31st March 2020 was overvalued by 20,000.
19:4231st March 2020, the price is overvalued by 20,000.
19:45The price is overvalued by 20,000.
19:50Closing stock is overvalued by 20,000.
19:54Credit sale is more than a value of 10,000.
19:57The price is overvalued by 20,000.
19:59So, it should be now reduced. In which year? 19,000.
20:02But this over-evaluation of the closing stock is nothing but over-evaluation of the opening stock in the next year. Next year in the opening stock up, David's sale in excess of 10% profit.
20:17You have to add the 20,000 back. Stock adjustment. That is the error here. And there was a loss of fire amounting rupees 10,000 in the year 1819 which was not considered in trading account but correctly debited in the profit and loss account for that year.
20:45So, if there is a loss in a fire action, it will be a debit. That is okay. But now the question is, is it a regular loss or an abnormal item? It is an abnormal reason.
20:59If there is an abnormal reason in the period for you in the period of time, then you have to allow the difference in the period of time to pay interest for the amount.
21:01If you have to pay interest in the period of time for this period of time, the amount of payment, is to cut in the period of time.
21:03It will be a loss in the period of time. However, it will be all-pass, so that's the long period of time.
21:05Any abnormal reasons that profit or loss should be removed.
21:10If you have a debit in 1890, that's the logic.
21:17What do you want to add back?
21:19If you have a all pass batch, you will have all pass batch.
21:25You will have all pass batch.
21:29That's a special situation that may not happen.
21:40So, you cannot rely based on that one in the future.
21:43If you have abnormal losses, you will remove.
21:48So, abnormal loss reversed.
21:52If you have a profit, you will be able to reverse.
21:56If you have a gain, that profit is added to the same.
21:59If you have a gain, that profit is added to the same.
22:03If you have a gain, you will have a minus.
22:06If you have a gain, you will have a gain.
22:08Government may give subsidy.
22:10Okay, my friend is a student from Chennai institute.
22:16I am also paying some fees later.
22:31He has paid the subsidy for sure.
22:33He will pay for a flood again.
22:35He will pay for subsidy for it at the same time.
22:37Even if someone is on 3rd floor, he will pay for it every other side.
22:39If there is any abnormal revenue like subsidy you are receiving, may not be guaranteed.
22:46So, you have to think over these things.
22:57Clear?
22:58Now, one more point is this.
23:02What is that?
23:03Debtas as on 31st of March 2022 included a bad debt 5800.
23:12That is why last year there is a bad debt.
23:17Bad debt.
23:19After all this adjustment, the balance what you get you know is the adjusted profits.
23:31Adjusted profits.
23:32Adjusted profit.
23:33Is that clear?
23:34What about the adjusted profit for the year 1?
23:401 lakh 40,000.
23:42Here 1 lakh 60.
23:45Here 1 lakh 80.
23:48Here 2 lakhs.
23:50We have to find out the weighted average cost of capital.
23:53So, if we have to find out the weightage.
23:55We have to find out the latest profit.
23:574 years.
23:58We have to find out the latest profit.
23:594 lakhs.
24:00We have to find out the 3, 2, 1.
24:02Okay.
24:03This is weight.
24:04Now, summation of weight being 10.
24:15And weighted profit.
24:17The profit is weighted.
24:19If I multiply these two, I will get weighted profit.
24:221 lakh 40,000.
24:243 lakhs.
24:2660,000.
24:275 lakhs.
24:3040,000.
24:318 lakhs.
24:34And total of all this value being.
24:4110 lakhs 80,000.
24:44Am I right?
24:47Okay.
24:49Weighted average profit is equal to.
24:53Summation of weighted profit divided by summation of weights.
24:59Weighted average profit being 10.8 lakhs.
25:02Summation of weight being 10.
25:04Tappa Varda.
25:0518 lakhs.
25:06I think it is 18 lakhs.
25:07I am right.
25:08Clear?
25:0918 lakhs.
25:10It is 3 lakhs 20.
25:11Okay.
25:121 16 into 2.
25:133 lakhs 20.
25:14Okay.
25:15Now, we will be getting.
25:16So, 1.8 lakhs.
25:17Summation of weight being 10.
25:18Tappa Varda.
25:1918 lakhs.
25:20I think it is 18 lakhs.
25:21I am right.
25:22Clear?
25:23Clear?
25:2418 lakhs.
25:2518 lakhs.
25:26Var the?
25:27That is 3 lakhs 20.
25:28Okay.
25:29Now, we will be getting.
25:30So, 1.8 lakhs will be the weighted average profit.
25:34And goodwill is equal to.
25:35You have to multiply this with the number of years of purchase.
25:39Number of years of purchase in this case being.
25:423 years purchase.
25:455.
25:465.
25:474 lakhs.
25:485.
25:494 lakhs.
25:505.
25:514 lakhs.
25:525.
25:534 lakhs.
25:54Is that clear?
25:55Irving.
25:56What about.
25:58Now, goodwill.
26:02ca guid?
26:07Raise the goodwill.
26:08Old ratio, cancel the goodwill in the new ratio.
26:11cu, AU, AG.
26:165.4 rise from both the old ratio 1 of 5 is to 3 ratio that I am raised from now come on tell me
26:23you load it 3 legs 3 legs that is 7 500 and in here 2 legs 2,500 2 legs 2,500
26:46dash that cancel upon both the new ratio 2 is to 1 is to 1 ratio I am cancel upon now 2,700,000 135,000 am I right
26:582,70,000 1,35,000 1,35,000 rise from the credit cancel from the debit
27:05and CU 67.5,000 credit and 67.5,000 credit and 67.5,000 credit I have 135,000 debit here
27:21but now he has cash for cash for cash he brings cash for this
27:27then enter the bank account debit
27:30and only 2,000 credit and 1,15,000 credit for cash for the cash and bank account
27:34here is the return of the bank account
27:35and this is the return of the bank account
27:532, okay, that's what you want to say, CU's capital is 67,500, AU's capital is 67,500,
28:19Tannudai capital 2 lakhs to AG's capital, 2 lakhs, clear, hope you will be able to now understand the complete journal entry here.
28:35So, with that one of the comprehensive illustrations of Goodwill is over.
28:453,000, 4000, correct, okay, if you get to the right, okay, calculation, sorry, okay, clear,
29:07clear.
29:09Okay.
29:11Okay.
29:13Okay.
29:15Okay.
29:17Okay.
29:22Okay.
29:33Do you want to do the text?
30:33Now, shall I go for the MCQ questions?
31:03Test your knowledge.
31:10We will start with true or false here.
31:18Goodwill is intangible assets, therefore cannot be valued.
31:25Intangible assets cannot be valued.
31:27Goodwill is valued whenever there is a change in the profit sharing ratio among the partners.
31:36Death and admission, retirement, sale and change of the P&L ratio.
31:42So, profit sharing ratio is correct.
31:49Goodwill is the value of reputations of the firm in respect of profits expected in future.
31:55Profit expected in future.
31:58Future maintainable profit.
32:00It is not future, simply future profit is a future maintainable profit.
32:04In the past year's profit, if it is an abnormal reasons or errors, it will affect the future effect.
32:11So, it is not past expected profit.
32:13What about the future expected profit?
32:14Maintainable profit.
32:15Past profit is a plus or minus.
32:16And what about the normal profit?
32:17Normal rate of profits?
32:18So, what about the future expected profit?
32:20Maintainable profit.
32:21Past profit is a plus or minus.
32:23And what about the normal profit?
32:26Normal rate of profits.
32:28So, this is a super profit method.
32:31If you are aware of what you are aware of,
32:34if you are aware of what you are aware of,
32:35then you are aware of goodwill.
32:37So, this one is true.
32:38This one is true.
32:39Super profit.
32:40Excess earning power is called goodwill.
32:43If you have a bank,
32:45if you are aware of your business,
32:47then you can go to your business.
32:49Then, you can go to your business.
32:51Then, you can go to your business.
32:52If you are aware of it,
32:53then you can go to your business.
32:54The extra 5,000,
32:55then you can get a goodwill calculation.
32:56That is correct.
32:57Now, fourth.
32:58At the time of admission or retirement of a partner,
33:01goodwill can be raised in the books of accounts and shown as an asset.
33:04Rising in the book of accounts and shown as an asset.
33:06So, it is false.
33:08So, this is false.
33:09The third one is according standards.
33:12You see,
33:15goodwill value assets.
33:16Balancing assets are full of old partners and the assets are full of assets.
33:20You see,
33:22you are sending the capital.
33:24You get rich.
33:25If you have a bank,
33:27you need a cash-in-funding bank account for goodwill.
33:28Then,
33:29Goodwill is like a cash-in-viewed bank account.
33:30And it needs to go to AES number 27.
33:32So, AES number 26 has an intangible asset.
33:34The accounting standard for intangible assets.
33:36The prices in general make a lot of rising and rising benefits.
33:39That is the ultimate results premium for Goodwill, sacrificing and gaining ratio, but ultimate
33:45results are beginning to gain, rise and cancel.
33:52Is that okay?
33:53So, false is the correct word.
33:55Only simple average profit method be used for valuation of Goodwill up in the rank of
33:59false.
34:00You can use the weighted average method also, even super profit method also, capitalization
34:03method, anti method, all the method with it.
34:06Super profit means excess of actual average profit over the normal profit.
34:10Normal profit means excess of average profit over the normal profit, then it is true.
34:14Seventh, normal profit means profit earned by similar companies in the same industry.
34:18Similar industry, what is earned by normal profit?
34:20Correct.
34:21That is correct.
34:22And normal profit depends upon normal rate of return and past profits.
34:29Past profit based money, capital implied based money.
34:33So, normal profit is nothing but normal rate of return into capital, implied will be taken.
34:37So, this answer being false.
34:41Now, ninth one, at the time of admission, retirement of a partner, since Goodwill cannot be raised
34:51in the books of accounts, it is recorded through capital accounts of the partners.
34:54True.
34:55So, what happens if we have raised in the book, and the impact of the partners in the capital
34:58one, we have to adjust.
34:59That is correct.
35:00At the time of admission of a partner, Goodwill brought in by new partner to shared equally
35:04by old partners.
35:05Equally, it is required.
35:06We have to sacrifice what we have to do in the other ratio.
35:09Sacrificing ratio will be the correct one.
35:10So, it is false.
35:11So, with that true or false is over.
35:28Now, let us move on to the next one, MCQ.
35:36Goodwill brought in by incoming partner in cash for joining in partnership firm is taken
35:40away by the old partners in their which ratio?
35:44Sacrificing ratio.
35:45Okay.
35:46C is the correct one.
35:47A and B are partner sharing profits and losses in the ratio of 5 is to 3.
35:52And admission C brings 70,000 cash and 48,000 has, 48,000 against Goodwill.
35:59It is one cash, Goodwill is over.
36:01New profit sharing ratio between A, B and C are this one.
36:03Find out the sacrificing ratios of A and B. Sacrificing ratio is the sacrificing ratio.
36:08So, old ratio minus new ratio is the sacrificing ratio, clear.
36:14Now, if you look at A, old ratio is 5 by 8, new ratio being 7 by 16, otherwise 16 is 10 minus 7, 3 by 16 A, B
36:32So, A is the correct answer.
36:33Okay.
36:34So, A is the correct answer.
36:35Okay.
36:36So, A is the correct answer.
36:37Okay.
36:38So, A is the correct answer.
36:39Okay.
36:40So, A is the correct answer.
36:41Okay.
36:42So,
36:47A is the correct answer.
36:52Okay.
36:53So, A is the correct answer.
36:58Okay.
36:59So, what do you do?
37:01Rise the goodwill.
37:03Actually, you have to work out
37:07OMR sheet.
37:11Then you have to work out OMR sheet.
37:13OMR sheet
37:15It's not bad.
37:17It's not bad.
37:19OMR sheet is not bad.
37:21If you raise the goodwill
37:235 is the 3 ratio.
37:25Ok. 25
37:27Sorry.
37:2930
37:3118
37:3330 and 80
37:35Cancel the goodwill in the new ratio.
37:3916
37:4121,000
37:4315,000
37:4520,000
37:47Is that ok?
37:499
37:519 is to 3 is the sacrificing ratio.
37:53The rise and cancel the ultimate
37:55results are clear.
37:57That is the sacrificing ratio.
37:59If you raise the ratio,
38:01rise and cancel the ultimate results
38:03that is easier.
38:05And the rise and cancel ultimate results
38:07sacrificing ratio.
38:09Second one is over.
38:11Now, let's go for the third one.
38:13Let's go for the third one.
38:15Let's go for the third one.
38:23Following are the factors affecting goodwill.
38:25Except,
38:27nature of business.
38:29Three.
38:30Efficient of management
38:31location of the customers.
38:32Location of the customers.
38:33Location of the customers.
38:35Business is the correct one.
38:37A may be the correct one.
38:39If the rent may affect
38:40pannu,
38:41it is the effect pannadu.
38:42It is the effect pannadu.
38:43It is the answer.
38:44C is the answer.
38:46Fourth.
38:47Weighted average method of calculating goodwill should be followed when profits has increasing
38:53trend, decreasing trend.
38:54.
38:56Either the past year's profit showing increasing or decreasing trend, we can follow weighted average.
39:02If there is no trend, we can follow simple average method.
39:06Now, fine.
39:07In the absence of any provisions in the partnership agreement, profits and losses are shared equally.
39:15It is very simple question.
39:16Okay.
39:17So, the answer is easier.
39:19Easy one is happy.
39:21Why are we going to pass?
39:22As soon as possible,
39:24what happens?
39:25The result is correct.
39:27It is tough.
39:28We will pass easily.
39:30We will pass easily.
39:31We will pass easily.
39:32It is tough.
39:33You will have the chance to pass more.
39:35It is tough.
39:36The minimum guaranteed results will be possible.
39:37It is a liberal valuation.
39:39If you have a C A.
39:40If you have an C A,
39:41in this case,
39:42the result will be given the value of the C A.
39:45You will see the value of the C A.
39:46If you have 50% of the C A to give you the value of the C A to give you the value of the C A.
39:48You will give the value of the C A to give you the C A.
39:49and give you the value of the C A.
40:03Okay, this is CA.
40:05If we are not aware of this, we are not able to pass.
40:08We are not able to pass.
40:11Foundation is not allowed.
40:13If you are not able to pass, you will have a number of 20% to the number of 20%.
40:19It is not a big deal, you can pass the exams, but you are committed.
40:23CA is not allowed to have a restriction, but CA is not allowed.
40:28Now, let's see question number 6.
40:31The profits and losses for the 4 years being 18-19, 10,000, 19-20, losses 10,000, 20-21,
40:50profits 98, 21-22, profits 76,000.
40:57The average capital employed in the business being 2,00,000 and the rate of interest expected
41:01from capital invested being 12 percentage of the rent, multiple depending on the normal
41:05profit being 24,000, 24,000.
41:10The remuneration of partners estimated to be 1000 per month not charged in the above losses
41:17and profits.
41:18Calculate the value of the goodwill on the basis of 2 years purchase of super profits based
41:22on the average of the average of 4 years.
41:23So, rent versaththila namakku lost on thirukku.
41:25Okay, this is 2500 or second year, okay this is 2500.
41:29Rent versaththila lost on thirukku.
41:30Rent versaththila gain on thirukku.
41:31Right.
41:32Now, even on the salary, the remuneration of partners estimated to rupees, 1000 up to
41:4412 months putting in the 12,000 rupees will be the salary.
41:47Either average profit on the number subtract panic law.
41:49What is the average profit?
41:50Come on.
41:51Get the total profits.
41:56Make it faster.
42:01You know?
42:061,061,500 minus salary.
42:07Ah, the average dividend divided by 4 average being.
42:20Yowlo?
42:213, 75, 75 minus salary.
42:31So, hathuna partners theirDR kearoang.
42:33So, I Ayily, dropping 12,000 is några subtract Cost.
42:43Udhaa?
42:44Twenty?
42:4518,375.
42:468,375.
42:47struggling.
42:48Eight hundred three seventy five.
42:49This is future maintainable profit or expected profit.
42:51Other than normal profit we subtract, normal profit being 24,000.
42:55other than the normal profit we subtract normal profit being 24,000 then you will get the super
43:01profit 4,375 2 years purchase so you have to multiply with 2 to get the goodwill 8,750 so
43:11b is the correct answer b is the correct answer clear now 7th question 7th question
43:33yes
44:03let us try the 7th question
44:23a, b and c are partners sharing profits and losses in the ratio of 3 is to 2 is to 1 they
44:37decided to change their profit sharing ratio to 2 is to 2 is to 1 to give effect to this
44:42new profit sharing ratio they decided to value the goodwill at 30,000 upper rise the goodwill
44:50in the old ratio 3 is to 2 is to 1 15,10,5 cancel the goodwill to all the partners in the new
45:00ratio 2 is to 2 is to 1 12,000 12,000 6,000 3,000 credited 2,000 debited 1,000 debited so
45:15b c am c am i debit do not work it not credit so which is the correct answer a is the correct
45:24answer goodwill term is comes up with this module and the models are now already
45:31in the books of records. Purchased goodwill can be shown, but self generated on the account
45:39on the account. Clear? With that seventh question is also over.
46:09Let us move to the last illustration. Theory question, you need to understand how to write
46:16the theory answers also. Write short note on method of valuation, that is the method
46:22of valuation. Explain according treatment of goodwill in case of change in profit sharing
46:29ratio. Distinguish between super profit and capitalization basis. Super profit basis
46:37profit in excess of the normal profit is a super profit. Now, we will move on to the practical
46:49questions.
47:10Okay. So this is the profit we have.
47:36Wise, Clever and Dell were trading in partnership sharing profits and losses 4 is to 3 is to
47:513 respectively. The accounts of the firm are made up to 31st December every year. The partnership
47:58provided inter earlier that on the death of a partner, the goodwill was to be valued at
48:023s purchase of the average profits of the 3s up to the date of death. Okay.
48:09Why is 돼 to have 3s?
48:22After detecting interest say 8 percentage on capital implied and then the fair remuneration
48:28of each partner, interest on capital deduct pannunga, salary deduct pannunga, varad the
48:33number of profit.
48:34Right.
48:35The profits are assumed to be earned evenly throughout the year.
48:38Allows are more profit on the year, on the 30th June 22, wise died.
48:50So, what did he do?
48:5330th June 22, it was agreed on his death to adjust the goodwill in the capital accounts without
49:00showing any amount of goodwill in the balance sheet.
49:03So, goodwill have come, capital account only adjust pannunga, goodwill in our account open
49:06pannunga, koodaath pannunga.
49:10So, the fair remuneration of each partner, the first round of each partner, the first
49:17on the end of the year in the start of the year 36, 21, 36, 20, 36, 19, this is year
49:311, this is year 2, this is year 3.
49:35but you also have to do this with June 22,
49:42they only have the average of 2.
49:46And then the next month, 6thth month.
49:48Okay,
49:50in January 31st,
49:52it was 6th month,
49:53but in January 31st,
49:55it was 3rd month and 5th month,
49:57so the average of 2nd,
49:58is correct.
50:00we will do anything details.
50:02Okay,
50:03Okay. 1st January 2021, 31st December 2021, 31st December 2022. In the version you have
50:22profit is 62,400. In the version you have a profit is 72,000. But how do you calculate
50:33the period? 1st July 2021, 31st December 2021, 31st December 2022, 31st December 2021.
50:42In this period, the period of 31st December 2021, 31st December 2021, 31st December 2021,
50:5467,200. But surprisingly, the answer is the two average. Okay. If you have a short cut
51:09you understand. So, for this year 67,200. In the version of the in the rendered average
51:16, 73,800. In the rendered average , 71,400. Now the total being 2,12,400. 2,12,400. Take
51:43the average. 70,800. Average profit. Clear.
51:56Other than my panel is for no. Interest on capital and reasonable salary of the partners. Right.
52:07Interest on capital being 8 percentage. It was agreed for the purpose of valuation of good
52:11salary. That the fair remuneration for work done by each partner would be 15,000 per annum.
52:16That would be the first three partners. 50,000 per annum.
52:21Salary fair remuneration subtracted. At the same time, capital employed would be 15,000 per annum.
52:29That would be 8 percentage interest calculated. I think that value being 12,480. If we subtract the
52:34future maintainable profit after this, you will be future maintainable profit after this. 13,320.
52:45So, the goodwill will be?
52:49960.
52:51Inter 3.
52:5239.
52:53960.
52:54960.
52:55The following were the amounts of profits of earlier years before charging interest on capital
53:01empire law. You are required to complete the value of goodwill and show the adjustment thereof
53:06in the books of the firm. Okay. So, what is the new ratio? New ratio is not.
53:184 is to 3 is to 3 is to 3 is to 0. Suppose, Y is around the better, Y is around the better
53:24if they are cut from the new ratio. Old ratio 4 is to 3 is to 3, new ratio is 1 is to 1.
53:313 is to 3, otherwise, named as 1 is to 1. So, this is the model in case of retirement. How can we find out the new ratio in case of retirement?
53:39How can we find out the model in single academy concept lectures? Right.
53:44How can we find out the new ratio? We can find out the new ratio.
53:48In this case, there is old ratio and gaining ratio.
53:53If we find out the new ratio, old ratio and sacrificing ratio, we can find out the old ratio and gaining ratio.
54:00We can also find out the new ratio. If we find out data entry, get out of sacrifice.
54:08Who's sacrifice? Who's sacrifice? Who's sacrifice? Who has the new ratio, so how can we credit it.
54:12To Vice Capital. Right.
54:15Alright, how do you share? 4 tenths. 4 tenths of 39,960. How do you share? 15,984. Should be shared by the continuing partners, Clubber and Dell.
54:37How do you share? 1 is to 1. Equal share. 7,992. 7,992. Sir, I know green in the mariozikambootie. Sir, I know green in the mariozikambootie.
54:56Sir, I know green in the mariozikambootie. Sir, I know green in the mariozikambootie.
55:08I know. 39,960. 4 to 3 to 3 ratio. 15,984. How do you share? 3 share. 11,988.
55:28This is credit. Cancel the goodwill in the new ratio. Sir, new ratio. Retirement up new ratio. Death up.
55:38One is to 1 ratio. 19,980.
55:40Is the debit value. Net punning na ultimate value being 15,984. Vice is the credit.
55:46You will get the same answer. In either way, you can solve this illustration.
55:48You will get the same answer. In either way, you can solve this illustration.
55:52Eppi ndi you will get the same answer. Eppi ndi you will get the same answer. In either way, you can solve this illustration. Eppi ndi you will get the same answer.
56:12In either way, you can solve this illustration. Eppi ndi you will get the same answer. Eppi ndi you will get the same answer.
56:28You can do this way also. Hope now you will be able to understand the treatment of goodwill in partnership. Guarantee you will get around 3 marks, 2 marks also.
56:37So, in a comprehensive illustration, goodwill treatment one day sir. Goodwill lamal unglada pomodiyer. Ok. Become master over this.
56:44So, with that, this chapter is over.