Question

3. A firm earns profit of 1,10,000. The Normal Rate of Return is 10% on
Capital. Assets of the firm are 11,00,000 and Liabilities * 1,00,000.
Value of Goodwill by Capitalisation of Average Profit will be (1)​

Answer 1

Answer:

this is the answer.i

Explanation:

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Answer 2

Average Profit earned by the firm = ₹1,10,000 Capitalized Value of the firm = 1,10,000 X 100/10

= ₹11,00,000

Assets = ₹11,00,000

Liabilities = ₹1,00,000

Capital Employed = 11,00,000 - 1,00,000

= ₹10,00,000

Goodwill of the firm,

= Capitalized Value of the firm - Capital Employed

= 11,00,000 - 10,00,000

= ₹1,00,000