Question

A and B are partners in a firm. The capital employed of the firm is 500000 and normal rate of return is 10% per annum. Annual salary of each partner is 8000.the average profit was 80000 for last 10years. Calculate the value of Goodwill by super profit capitalisation method.

Answer 1

Answer:

80000 * 100/10 =800000

Answer 2

Answer:

Goodwill = 140000

capitalisation value = 640000