Question

A firm earns ₹300000 as its annual profit, tha rate of return being 12%.Assets and liabilities of the firm amounted to ₹3600000 and ₹1200000 respectively.​

Answer 1

asset=3600000

liability=1200000

so capital=3600000-1200000=2400000

rate of return=12%

normal return=2400000×12÷100=288000

actual return=300000

goodwill=300000-288000=12000

note, goodwill is the diff between expected normal return and actual return