Question

A. If the business has earned average profits of 1,00,000 during last few years and the normal rate of return in similar business is 10%. If the goodwill is valued at 3 years purchase of super profit. The assets of business where 10,00,000 and its liabilities 1,80,000. Find out the value of goodwill by Capitalization of Average profit method. B. The average profit earned by affirm is Rs. 75,000 which includes undervaluation of stock of Rs.5,000 on an average basis. The capital invested in the business is Rs. 7,00,000 and the normal rate of return is 7%.Calculate goodwill of the firm on the basis of 5 times the super profit. 2+2 =4

Answer 1

Answer:

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