Question

A firm is expected to earn profit worth 68,000/- per annum. the capital invested 3,50,000/- and the rate of return estimated to be 12% in similar business. the remuneration payable to partners is estimated at 8,000 /- per annum. the goodwill is calculated at two years purchase of super profit , find out the amount of goodwill.
​

Answer 1

Answer:

Average profit= 68000-remuneration

= rs. 60000

Normal profit= capital x normal rate of return/100

= 350000 x 12/100

= 42000

Super profit = Average profit - normal profit

= 60000 - 42000 = Rs. 18000

Goodwill = Super profit x No. of years' of purchase

= 18000 x 2 = Rs. 36000 is the goodwill

Explanation:

Mark me as Barinlist