Question

. (A) The average net profit expected in future by ABC firms are *75,000 per year. The average capital employed in the business by the firm is * 3,00,000. The rate of return ex- pected from capital invested in this class of business is 12%. The remuneration of the part ners estimated to be *9,000 per annum.​

Answer 1

Answer:

Step 1: Calculation of Normal Profit:

Normal Profit= Capital employed * [ Normal rate of return/100]

= 200000* [10/100]

= 20000

Step 2: Calculation of Actual Profit:

Actual Profit= 36000-6000

= 30000

Step 3: Calculation of Super Profit:

Super Profit= Actual profit- Normal Profit

= 30000- 20000

=10000

Step 4: Calculation of Goodwill:

Goodwill= 10000* 2

= 20000

Answer 2

GIVEN

• The average net profit expected in future by ABC firms are *75,000 per year.
• The average capital employed in the business by the firm is * 3,00,000.
• The rate of return ex- pected from capital invested in this class of business is 12%.
• The remuneration of the part ners estimated to be *9,000 per annum.

Explanation:

Step 1 :- Calculation of Normal Profit

• Normal Profit = Capital employed * [ Normal rate of return/100]

= 300000* [12/100]

= 36000

Step 2 :- Calculation of Actual Profit

• Actual Profit = 75000 - 9000

= 66000

Step 3 :- Calculation of Super Profit

Super Profit = Actual profit - Normal Profit

= 66000 - 36000

= 30000

Step 4 :- Calculation of Goodwill

• Goodwill = 30000*2

= 60000