The average Profit of the firm is ₹ 6,00,000. Total tangible Assets in the firm are ₹ 28,00,000 and Outside Liabilities are ₹ 8,00,000. In the same type of business, the normal rate of return is 20% of the capital employed. Calculate the value of goodwill by Capitalisation of the Super Profit Method.
The average Profit of the firm is ₹ 6,00,000. Total tangible Assets in the firm are ₹ 28,00,000 and Outside Liabilities are ₹ 8,00,000. In the same type of business, the normal rate of return is 20% of the capital employed. Calculate the value of goodwill by Capitalisation of the Super Profit Method.
a) ₹ 10,00,000
b) ₹ 5,00,000
c) ₹ 2,50,000
d) ₹ 15,00,000
Anurag Pathak Changed status to publish April 17, 2023
Ans – a)
Explanation:-
Capital Employed = Tangible Assets – Outside Liabilities
Capital Employed = 28,00,000 – 8,00,000
Capital Employed = ₹ 20,00,000
Normal Profit = Capital Employed × Normal Rate of Return
Normal Profit = 20,00,000 × 20%
Normal Profit = ₹ 4,00,000
Super Profit = Average Profit – Normal Profit
Super Profit = 6,00,000 – 4,00,000 = ₹ 2,00,000
Goodwill = Super Profit/Normal Rate of Return
Goodwill = 2,00,000 × 100/20 = ₹ 10,00,000
Anurag Pathak Changed status to publish April 17, 2023
