Question

A business earned an average profit of ₹8,00,000 during the last few years. The normal rate of profit in the

similar type of business is 10%. The total value of assets and liabilities of the business were ₹22,00,000 and

₹5,60,000 respectively. Calculate the value of goodwill of the firm by super profit method if it is valued at 21

2

year’s purchase of super profit.

Ans: Goodwill - 15,00,000.
please solve it​

Answer 1

Answer:

12th

Accountancy

Reconstitution of a Partnership Firm - Admission of a Partner

Valuation and Adjustment of Goodwill

A business earned an averag...

ACCOUNTANCY

A business earned an average profit of Rs. 8,00,000 during the last few years. The normal rate of profit in the similar type of business is 10%. The total value of assets and liabilities of the business were Rs. 22,00,000 and Rs. 5,60,000 respectively. Calculate the value of goodwill of the firm by super profit method if it is valued at 2

2

1

years purchase of super profit.

MEDIUM

Help best friend

Study later

ANSWER

Calculation of goodwill under super profit basis:

Net assets or capital employed = Total assets - Total liabilities

Net assets or capital employed = Rs. (2200000 - 560000) = Rs. 1640000

Average profit = Rs. 800000

Normal profit = Capital employed * rate of interest

Normal profit = Rs. 1640000 * 10% = Rs. 164000

Super profit = Average profit - Normal profit

Super profit = Rs. (800000 - 164000) = Rs. 636000

Goodwill = Super profit * No. of year's purchase

Goodwill = Rs. 636000 * 2.5 years

Goodwil = Rs. 1590000

Explanation:

Hope it helps you

plz bro give me brainiest

and follow me