Question

Average profit for the last 5 years were Rs 2,67,000. Amount of capital employed Rs 14,00,000. Non-trading income Rs 10,000 and debenture interest Rs 20,000. Income tax rate 40%. Normal rate of profit 10%. What should be the value of goodwill on the basis of capitalisation of average profit?​

Answer 1

Explanation:

= (12000 X 100/8) = 150000