Question

31. A company earned a profit of ? 15,00,000.
The average
average capital employed was
* 50,00,000 of company. Normal rate
of return was 15%. If goodwill is valued
on the basis of 3 years purchase of super
profit, then the value of goodwill will be:
​

Answer 1

Answer:

super profit= actual profit-normal profit

normal profit=capital employed×normal rate of return

Goodwill=super profit ×years of purchase

Explanation:

normal profit = 5000000×15%=750000

super profit= 1500000-750000=750000

Goodwill=750000×3=22,50,000

Goodwill=2250000

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Answer 2

Answer:

The Value of Goodwill will be 22,50,000

Explanation:

Solution :

Goodwill = Super Profit × No. of years of Purchases

Normal Profit = Capital Employed × Normal Rate Of Return / 100

$\longrightarrow$ 50,00,000 × $\dfrac{15}{100}$

$\longrightarrow$ 7,50,000

Nornal Profit = 7,50,000

Super Profit = Average Profit - Normal Profit

$\longrightarrow$ 15,00,000 - 7,50,000

$\longrightarrow$ 7,50,000

Super Profit = 7,50,000

Goodwill = Super Profit × No. of years of Purchases

$\longrightarrow$ 7,50,000 × 3

$\longrightarrow$ 22,50,000

Goodwill = 22,50,000

∴ The Value of Goodwill will be 22,50,000