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Ram and Prem are partners in a retail business. Balances in Capital and Current Accounts as on 31st March 2022 were:

Capital Account (₹) Current Account (₹)
Ram 2,00,000 50,000
Prem 2,40,000 10,000 (Dr.)

The firm earned an average profit of ₹ 90,000. If the normal rate of return is 10%. Find the value of Goodwill by Capitalisation Method.

a) ₹ 4,20,000

b) ₹ 2,10,000

c) ₹ 1,10,000

d) ₹ 2,20,000

Anurag Pathak Changed status to publish April 17, 2023
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