A-AS Level (CIE) Accounting Paper-3: Specimen Questions with Answers 42 - 45 of 50
Question 42
Question
MCQ▾Goodwill of a firm is valued at three years purchase of average profit of the last five yea$ The profits are as under: -
1997- $50000 (Profit)
1998- $20000 (Loss)
1999- $10000 (Profit)
2000- $60000 (Profit)
2001- $80000 (Profit)
What will be the value of goodwill?
Choices
| Choice (4) | |
|---|---|
| a. | 1,08,000 |
| b. | 80,000 |
| c. | 1,80,000 |
| d. | 1,00,000 |
Answer
a.Explanation
Question 43
Question
MCQ▾X ltd forfeited 200 shares of Simon of $10 each. $8 called up, on which he paid application and allotment money of $3 per share. Out of these, 100 shares were reissued as fully paid up for $8 per share. How much amount is transferred to capital reserve account?
Choices
| Choice (4) | |
|---|---|
| a. | 200 |
| b. | 100 |
| c. | 400 |
| d. | 300 |
Answer
b.Explanation
Amount to be transferred to Capital Reserve account is
Question 44
Question
MCQ▾X and Y entered a partnership with 50,000 and Rs. 60,000, after 4 months X invested Rs. 25,000 more while Y withdraw Rs. 20,000. Find the share of X in the annual profit of Rs. 289,000.
Choices
| Choice (4) | |
|---|---|
| a. | 17000 |
| b. | 15000 |
| c. | 270000 |
| d. | 170000 |
Answer
a.Explanation
Question 45
Question
MCQ▾What will be cash flow from investing activities from the following information?
| Purchases | Amount $ |
| Purchase of Machinery Purchase of Goodwill Purchase of investment Sale of Machine Sale of investment Sale of patents Interest & dividend received Rent received | 5,00,000 2,00,000 3,00,000 70,000 60,000 80,000 20,000 40,000 |
Choices
| Choice (4) | |
|---|---|
| a. | 7,30,000 |
| b. | -2,70,000 |
| c. | 2,70,000 |
| d. | -7,30,000 |
Answer
d.Explanation
| Cash Flow from Investing activities | $ | |
| Add: - - - - ———— - - Less: | Sale of Machinery 70,000 Sale of Investment 60,000 Sale of Patent 80,000 Interest and Dividend received 20,000 Rent received 40,000 ——————————————– Purchase of machinery 5,00,000 Purchase of investments 3,00,000 Purchase of goodwill 2,00,000 | 2,70,000----———————————--10,00,000 |
| Cash flow from investing activities | -7,30,000 |