21. From the following information, compute the value of goodwill by capitalising
super profits:
(i) Average capital employed is Rs. 2,00,000
(ii) Normal rate of profit is 10%
(iii) Profit for 1991 Rs. 31,000; 1992 Rs. 29,500; 1993 - Rs. 33,000
(iv) Profit for 1992 has been arrived after writing off abnormal loss of Rs. 1,000 and
profit for 1993 includes a non-recurring income of Rs. 1.500.
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Answer:
normal profit =200000×10÷100= 20000
average profit =31000+30500+31500÷3=72000
Super profit =72000-20000= 52000
capitalised profit = 52000×100÷10 = 5,20,000
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