Question

31. A firm eamed average profit of 3,00,000 during the last few years. The normal rate of return of the industry
15 The assets of the business were 17,00,000 and its liabilities were * 2,00,000.
Calculate the goodwill of the firm by capitalisation of average profits.
(CBSE 2019)

Answer 1

Answer:

₹1500000

Explanation:

goodwill= capitalised value of the firm - net assets

goodwill=2000000-1500000=₹500000

where,

Average profit = ₹300000

normal rate of return=15%

capitalised value of the firm = average profit/ normal rate of return ×100=300000/15

capitalised value of the firm = ₹2000000

net assets = total assets- liabilities- net assets =1700000-200000=₹1500000

Answer 2

Answer:

answer is rs 15,00,000

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