a business has earned average profit of 1 00 000 and liabilities is 180000 normal rate of return 10 percentage find out value of goodwill capitalisation of super profit. super profit 3 yrs purchase of super profit.
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5,40,000
Explanation:
step1: find out the total assets on the basis of average profit.
capitalisation of average profit= 1,00,000×100÷10
=10,00,000
step2: now we have to find out the capital employed in order to find out the normal profit.
capital employed= 10,00,000-1,80,000
= 8,20,000
normal profit = 8,20,000×10÷100
=82,000
super profit = 1,00,000-82,000
= 18,000
capitalisation of super profit= 18,000×100÷10
=1,80,000
goodwill= super profit × no. of years purchased
=1,80,000×3
= 5,40,000
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