Question

Actual Average profit - 72000
Normal rate of return - 10%
Assets - 970000
Liabilities - 400000


Calculate goodwill according to the capitalisation of super profit

Answer 1

Answer:

Assets - Liabilities = capital

9,70,000 - 4,00,000

= 5,70,000

Super profit = Average profit - Normal profit

= 72,000 - 57,000

= 15,000

Goodwill = Super profit × 100/NRR

OR

Capitalised value of Super profit

= 15,000 × 100/10

= 1,50,000

Answer 2

GOODWILL =  Rs.1,50,000

GIVEN: Actual Average profit - 72000

             The normal rate of return is 10% for Super Profit.

             Assets - 970000

             Liabilities - 400000

TO FIND: Goodwill by Super Profit Method

SOLUTION: As we know,

Capital = Liabilities deducted from Assets

            =Rs. 9,70,000 - Rs.4,00,000

            = Rs.5,70,000

Now,

Super profit = Normal Profit deducted from Average Profit

                    = Rs.72,000 - Rs.57,000

                    = Rs.15,000

Also,

Goodwill = Super profit multiplied  by Normal Rate of Return/100

               = Rs.15,000 × 100/10

               = Rs.1,50,000

Therefore, Capitalised Value of Super Profit is Rs.1,50,000.

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