A firm earns a profit of ₹ 5,00,000. The normal Rate of Return in a similar type of business is 10%. The value of total assets (excluding goodwill) and total outsider’s liabilities as on the date of goodwill are ₹ 55,00,000 and ₹ 14,00,000 respectively.
A firm earns a profit of ₹ 5,00,000. The Normal Rate of Return in a similar type of business is 10%.
The value of total assets (excluding goodwill) and total outsider’s liabilities as on the date of goodwill are ₹ 55,00,000 and ₹ 14,00,000 respectively.
Calculate the value of goodwill according to the Capitalisation of the Super Profit Method as well as the Capitalisation of the Average Profit Method.
[Ans.: Goodwill – ₹ 9,00,000 in both cases.]
Anurag Pathak Changed status to publish April 18, 2023
