Question

21. The following information relates to a partnership firm:-
(a) Profits for the last six years: - 1994: 18,000(Loss); 1995: 30,000; 1996: * 25,000; 1997:
55,000; 1998: * 65,000; 1999: 95,000. (b) Average capital employed 3,00,000. (C) Normal
rate of profit is 10%. Find out the value of goodwill on the following basis:- (a) Four years
purchase of average profit; (b) Four years purchase of super profit; (c) Capitalization of
super profit.​

Answer 1

Answer:

21. The following information relates to a partnership firm:-

(a) Profits for the last six years: - 1994: 18,000(Loss); 1995: 30,000; 1996: * 25,000; 1997:

55,000; 1998: * 65,000; 1999: 95,000. (b) Average capital employed 3,00,000. (C) Normal

rate of profit is 10%. Find out the value of goodwill on the following basis:- (a) Four years

purchase of average profit; (b) Four years purchase of super profit; (c) Capitalization of

super profit.

Answer 2

Answer:

21. The following information relates to a partnership firm:-

(a) Profits for the last six years: - 1994: 18,000(Loss); 1995: 30,000; 1996: * 25,000; 1997:

55,000; 1998: * 65,000; 1999: 95,000. (b) Average capital employed 3,00,000. (C) Normal

rate of profit is 10%. Find out the value of goodwill on the following basis:- (a) Four years

purchase of average profit; (b) Four years purchase of super profit; (c) Capitalization of

super profit.