Jagat and Kamal are partners in a firm. Their Capitals are Jagat ₹ 3,00,000 and Kamal ₹ 2,00,000. During the year ended 31st March 2023, the firm earned a profit of ₹ 1,50,000. The normal rate of return is 20%. Calculate the value of the Goodwill of the Firm by Capitalisation Method.
Jagat and Kamal are partners in a firm. Their Capitals are Jagat ₹ 3,00,000 and Kamal ₹ 2,00,000. During the year ended 31st March 2023, the firm earned a profit of ₹ 1,50,000. The normal rate of return is 20%. Calculate the value of the Goodwill of the Firm by Capitalisation Method.
a) ₹ 2,00,000
b) ₹ 5,00,000
c) ₹ 3,50,000
d) ₹ 2,50,000
Anurag Pathak Changed status to publish April 17, 2023
Ans – d)
Explanation:-
Capital Employed = Jagat’s Capital + Kamal’s Capital
Capital Employed = ₹ 3,00,000 + ₹ 2,00,000
Capital Employed = ₹ 5,00,000
Capitalised Value of Average Profit = Average Profit/Normal Rate of Return
Capitalised Value of Average Profit = 1,50,000 × 100/20
Capitalised Value of Average Profit = ₹ 7,50,000
Goodwill = Capitalised Value of Average Profit – Capital Employed
Goodwill = ₹ 7,50,000 – ₹ 5,00,000
Goodwill = ₹ 2,50,000
Anurag Pathak Changed status to publish April 17, 2023
