a business earned average profits of rs 100000 during the few years. the assets of the businesswerers 1000000 and external liabilities was rs 180000. calculatethe value of goodwill is valued at 2.1/2 years purchase of super profit.
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Explanation:
A business has earned average profits of Rs 1,00,000 during the last few years and the normal rate of return in similar business is 10%. (ii) Super profit method if the goodwill is valued at 3 years purchase of super profit. The assets of the business were Rs 10,00,000 and its external liabilities Rs 1,80,000.
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