The following information relates to a partnership firm: (a) Profits/Losses for the last six years:
The following information relates to a partnership firm:
(a) Profits/Losses for the last six years:
| Years | Profits (₹) |
| 1st Year | 20,000 |
| 2nd Year | 60,000 |
| 3rd Year | 10,000 |
| 4th Year | 60,000 |
| 5th Year | 50,000 |
| 6th Year | 72,000 |
(b) Average Capital Employed is ₹ 2,00,000.
(c) Rate of normal profit is 15%
Find out the value of goodwill on the basis of :
(I) Four year’s purchase of average profits.
(ii) Four year’s purchase of super profits
(iii) Capitalisation of average profits.
(iv) Capitalisation of Super Profits.
Answers:
(i) On the basis of average profits ₹ 1,68,000. (ii) On the basis of Super profits ₹ 48,000. (iii) On the basis of capitalisation of Average profits ₹ 80,000 (iv) On the basis of Capitalistion of Super Profits ₹ 80,000
Anurag Pathak Changed status to publish July 16, 2024
