TS Grewal Solutions 2026-27 [Class 12] – Partnership Goodwill – Q 01 to 10

Solution for Q 01 to 10 of Chapter 2 of T S Grewal Class 12 Accountancy 2026-27 are given below. These partnership accounts Goodwill class 12 T S Grewal Solutions are based on topics average profits method, average profits method with adjustments and weighted average profit method

Working notes are given with each solution. These help in understanding the steps and are also important for board exams as marks are given for steps. These solutions are also useful for CA Foundation, CS Foundation and CMA Foundation students. The solutions will be helpful for students as well as teachers teaching class 12 accounts.

Question 1

Profits for the last 4 years

2023	12000
2024	18000
2025	16000
2026	14000

Total profits	60000

Average profits of last 4 years	15000
No of years purchase	3
Value of Goodwill	45000

Question 2

Profits for the last 5 years

Year ending 31-Mar-2022	400000
Year ending 31-Mar-2023	398000
Year ending 31-Mar-2024	450000
Year ending 31-Mar-2025	445000
Year ending 31-Mar-2026	500000

Total profits	2193000

Average profits of last 5 years	438600	(2193000/5)

No of years purchase	4

Value of Goodwill	1754400	(438600*6)

Question 3

Year	Average
Year	last 4 years	last 5 years
2022		14000
2023	15500	15500
2024	10000	10000
2025	16000	16000
2026	15000	15000
Total profits	56500	70500
Average profits	14125	14100
	(56500/4)	(70500/5)

Note : Since average profits for last 4 years is higher so we will value Goodwill based on it

No of years purchase	4
Value of Goodwill	56500	(14125*4)

Question 4

Year	Actual	Adjustment	Adjusted
	Profits		Profits
31-Mar-22	125000		125000
31-Mar-23	100000	25000	125000
31-Mar-24	187500		187500
31-Mar-25	-62500		-62500
31-Mar-26	125000		125000

Total			500000

Average profits	100000	(500000/5)
No of years purchase	3
Value of Goodwill	300000

Note :

The abnormal loss of goods by fire has reduced the profits for 2022-2023.

If this incident had not happened then the profits for 2022-2023 would have been higher

Goodwill is based on profits that are projected to be earned in future.

Question 5

Calculation of average profits

Year	Actual Profits	Adjustment	Adjusted Profits
31-Mar-24	100000	12500	87500
31-Mar-25	125000	25000	150000
31-Mar-26	112500	12500	100000
Total profits			337500

Average profits	112500	(337500/3)
No of years purchase	2
Value of Goodwill	225000

Note :

Abnormal gain is non recurring profits and hence deducted

Abnormal loss is non recurring expense and hence added back

Insurance premium is a new expenditure to be incurred in future and hence deducted

Question 6

Calculation of average profits
From Date	01-Apr-22	01-Apr-23	01-Apr-24	01-Apr-24	01-Apr-25
To Date	31-Mar-23	31-Mar-24	31-Mar-25	31-Mar-25	31-Mar-26

Actual Profits	150000	350000	500000	710000	-590000
Add - Incorrect Travel Exp					100000
Less - Depreciation					25000
Less - Income on Non Trade Inv				10000	10000
Adjusted Profits	150000	350000	500000	700000	-525000

Total Profits					1175000
Average profits					235000
No of years purchase					4
Value of Goodwill					940000

Note :

1) Purchase of car is a capital expenditure. It was wrongly charged to revenue and hence added back

2) Since Car is a capital expenditure so depreciation should be provided on it every year from year of purchase

3) Interest on non trade investments is not a business profit. Hence this is to be excluded while finding profits

for the purchase of finding goodwill

Question 7

Calculation of average profits
	31-Mar-23	31-Mar-24	31-Mar-25	31-Mar-26
Actual Profits	80000	145000	160000	200000
Add - Abnormal Loss	20000
Less - Gain on sale of Fixed Assets		25000
Less - Insurance Premium			15000
Adjusted Profits	100000	120000	145000	200000

Total Profits				565000
Average profits (565000/4)				141250
No of years purchase				2
Value of Goodwill				282500

Note :
Abnormal loss is non recurring and hence added
Profit on sale of assets is a non recurring income and hence deducted
Insurance premium omitted is actually an expense for business and should be deducted to find real profits

Question 8

Year	Profits	Weight	Weighted Profit	(Profits X Weight)
31-Mar-22	20000	1	20000	(20000X1)
31-Mar-23	24000	2	48000	(24000X2)
31-Mar-24	30000	3	90000	(30000X3)
31-Mar-25	25000	4	100000	(25000X4)
31-Mar-26	18000	5	90000	(18000X5)
Total	117000	15	348000

Weighted Average Profit = Total of Weighted Profit / Total of Weights
		= 348000 / 15
		23200

Goodwill = Weighted Average Profits X No of Years Purchase
	= 23200 X 3
	69600

Question 9

Year	Profits	Less - Salary	Adj Profits	Weight	Weighted Profit
31-Mar-24	140000	90000	50000	1	50000	(50000*1)
31-Mar-25	101000	90000	11000	2	22000	(11000*2)
31-Mar-26	130000	90000	40000	3	120000	(40000*3)
	Total			6	192000

Weighted Average Profit = Total of Weighted Profit / Total of Weights
		= 192000 / 6
		32000

Goodwill = Weighted Average Profits X No of Years Purchase
	= 32000 X 4
	128000

Question 10

Year	Profits	Salary	Adjusted	Calculation
			Profits
Year 1	300000	120000	180000	(300000-120000)
Year 2	360000	120000	240000	(360000-120000)
Year 3	420000	120000	300000	(420000-120000)
Total Profits			720000
Actual Average Profits			240000	(720000/3)

Calculation
Capital Employed	1000000
Normal rate of return	15%
Normal Profits	150000	(1000000*15/100)

Super Profits	90000	(240000-150000)
No of Years Purchase	2
Goodwill	180000	(90000*2)

Q 1-10 | Q 11-20 | Q 21-30 | Q 31-37

T S Grewal Solutions – Partnership Accounts Goodwill – All Questions

T S Grewal Solutions Class 12 2026-27 – All Chapters

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