Question

4.Annual profit shown by a business
is Rs 20,000. Normal rate of return is
10%. Total assets of the firm are Rs
2,40,000 and liabilities Rs 80,000.
The value of goodwill by
capitalisation of super profit will be:​

Answer 1

Answer:

answer given in picture hope it helps u.

Answer 2

The Value of Goodwill = Rs. 40,000.

Explanation:

Solution :

★ Goodwill = Super Profits x (100/ Normal Rate of Return)

• Capital employed = Total assets - Liabilities

= 2,40,000 - 80,000

= 1,60,000

Capital employed = 1,60,000

• Normal Profit = Capital employed x Normal Rate of Return/100

= 1,60,000 × 10/100

= 16,000

Normal Profit = 16,000

• Super Profit = Average Profit – Normal Profit

= 20,000 - 16,000

= 4,000

Super Profit = 4,000

Goodwill = Super Profits x (100/ Normal Rate of Return)

= 4,000 × (100/10)

= 40,000

Goodwill = Rs.40,000

Therefore, The Value of Goodwill = Rs. 40,000.