Average profit of a firm Rs. 21,000
Normal Profit Rs. 18,000
Value of goodwill on the basis of 3 years purchases of super profit shall be-
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Answer:
Goodwill = 9,000
Explanation:
Given:
Average profit = 21,000
Normal Profit = 18,000
Find:
Goodwill
Computation:
Super profit = Average profit - Normal Profit
Super profit = 21,000 - 18,000
Super profit = 3,000
Goodwill = Super profit × 3
Goodwill = 3,000 × 3
Goodwill = 9,000
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