Average capital employed in business rs 600000 calculate the goodwill
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Capitalized Value of Average Profits = Average Profits X (100 / Normal Rate of Return)
=60000*100/10
=600000
Capital Employed = Assets – Liabilities
=540000-80000
=460000
Goodwill = Capitalised Value of Average Profits – Capital Employed
=600000-460000
=140000
Goodwill = 140000
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140000
Average capital
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