Question

Accountancy Good will Assignment: (23 Jul 2021) The books of a business showed capital employed Rs 500000. The profit for last five years 40000 ,50000, 60000 ,70000, 80000. you are required to find out the value of goodwill based on three years purchase of super profit and the normal rate of return 10 %​

Answer 1

Answer:

Capital employed:- 500000

Expected return:- 10%

Expected profit:- 500000*10/100=50000

[9/8, 7:51 AM] +91 98791 47793: Average profit :-

40000+50000+60000+70000+80000= ₹300000

300000/5= 60000

[9/8, 7:52 AM] +91 98791 47793: Super profit = Average - expected profit

60000-50000=10000

Goodwill:- super profit* No. Of year of purchase

10000*3... 30000

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