Question

Ans. R8,0
12. (Purchase of Simple Weighted Average Super Profits). Following is the Balance Sheet of
Mr. Chandy as on 30th September, 2017:
Liabilities
₹
Assets
Capital
General Reserve
Creditors
1,64,000 Land and Buildings
40,000 Plant
38,040 Investments
Stock
Bank
Debtors
36.000
54.000
30.000
26,850
75,990
19,200
2,42,040
2,42,040
Following were the net profits for the year ended 30th September :
2015 732,280 ; 2016 36,870 ; 2017 43,350.
The above amounts include income from investments, 71,800 each year.
You are required to value the goodwill of the above business (1) on simple average basis at
2 years' purchase of super profit and (i) at 2 years' purchase of the weighted average basis
super profit for 3 years, taking into account the fact that the standard rate of return on capital
employed in such type of business is 10% assuming that each year's profit is immediately
withdrawn in full by Mr. Chandy.
Ans. 1736,600 and (ii) 40,290].
Emplovod 1 74 000. Super Profit * 20.145 .​

Answer 1

Explanation:

Investments" (and any subsequent words) was ignored because we limit queries to