The average profit of GS & Co. is ₹ 50,000 per year.

The average Capital Employed in the business is ₹ 3,00,000. If the normal rate of return on capital employed is 10%.

Calculate the goodwill of the firm by:

(i) Super Profit Method at three year’s purchase; and

(ii) Capitalisation of Super Profit Method.

[Ans.: Goodwill – (i) ₹ 60,000; (ii) ₹ 2,00,000.]

Anurag Pathak Changed status to publish April 18, 2023