Question

. A firm had Assets of Rs 1,50,000 partner’s capital account showed a balance of Rs 1,20,000 and reserves constituted the rest . If normal rate of return is 10% per annum and Goodwill is valued at Rs48,000 at four years purchase of super profits , find the super profit of firm : *


Rs. 18,000

Rs. 6,000

Rs. 12,000

Rs 8,000

which one is Correct.?​

Answer 1

Explanation:

goodwill = super profit × no of year purchase

48000= super profit × 4

super profit = 48000/4

super profit = 12000

Answer 2

Super Profit is Option(c) Rs12000 and average profit is 30000.

Given:

Goodwill = 48000

Capital employed = 150,000

Rate of return = 10%

Time period = 4 yrs

To Find:

Super profit for the firm.

Formula used:

Goodwill = Super Profit × number of years purchase

Explanation:

Goodwill = Super Profit × number of years purchase

48000 = super profit × 4

Super Profit = $\frac{48000}{4}$ = 12000

Super Profit = Average Profit - normal profit

normal profit = Capital employed × $\frac{Rate of return}{100}$

                     = 150000 × $\frac{12}{100}$

                     = 18000.

Super profit = Average profit - normal profit

12000 = Average profit - 18000

Average profit = 12000 + 18000

                        = 30000.