Rohit and Hardik are partners sharing profits and losses equally. They decided to admit Surya as a partner for 1/3 share. For this purpose, the goodwill of the firm is to be valued
Rohit and Hardik are partners sharing profits and losses equally. They decided to admit Surya as a partner for 1/3 share. For this purpose, the goodwill of the firm is to be valued. From the following information, calculate the value of goodwill by:
(i) Capitalisation of Average Profit Method.
(ii) Capitalisation of Super Profit Method.
(a) Average Capital Employed
₹ 6,00,000
(b) Normal Rate of Return
12%
(c) Profit for last three years:
2021-22
2022-23
2023-24
₹ 90,000
₹ 80,000
₹ 1,00,000
(d) Assets (Excluding goodwill)
₹ 10,00,000
(e) Liabilities
₹ 4,00,000
[Ans.: Goodwill under both methods – ₹ 1,50,000.]
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