Question

A firm earns average profit of rs.110000, the normal rate of return in similar type of business is 10%, the value of total assets (excluding goodwill) and total outside liabilities are rs.1100000 and 100000 respectively, and the value of goodwill by capitalization method is?

Answer 1

Answer:

A firm earns profit of Rs. 5,00,000. Normal Rate of Return in a Similar type of business is 10%10%. The value of total assets (excluding goodwill) and total outsiders' liabilities as on the date of goodwill are Rs. 55,00,000 and Rs. 14,00,000 respectively. Calculate value of goodwill according to Capitalisation of Super Profit Method as well as Capitalisation of Average Profit Method.

Answer 2

Answer:

he earns Rs 500000

Explanation:

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