Question

A Partnership firm earned net profits during the last three years as follows: Year 2015-16 2016-17 2017-18 Profit 3,80,000 4,40,000 5,00,000 The capital employed in the firm throughout the above mentioned period has been 8,00,000. Having regard to the risk involved. 15% is considered to be a fair return on the capital. Remuneration of all partners during this period is estimated to be 2,00,000 per annum. Calculate the value of goodwill on the basis of i) two years purchase of super profits earned on average basis during the above mentioned three years and ii) by capitalisation method.​

Answer 1

Answer:

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Explanation:

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