Question

A and B are partners in a firm. The capital employed of the firm is 5,00,000 and normal rate ofturn is 10% per annum. Annual salary of each partner is 8,000. The average profit was80,000 for last 10 years.Calculate the value of goodwill by super profit capitalisation method.​

Answer 1

Answer:

Answer:

Average profit = ₹80,000

Capital employed = ₹5,00,000

Normal rate of return = 10%

Normal profit = ₹5,00,000 × 10/100

= ₹50,000

Super Profit = ₹80,000 - ₹50,000

= ₹30,000

So, Value of goodwill under capitalisation of super profit = ₹30,000 × 100/10 = ₹3,00,000.

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Explanation: