Question

C)
the year ended 31st March, 2020 the firm earned a profit of 7 1,50,000. The normal rate of return is 20%.
17. Jagat and Kamal are partners in a firm. Their Capitals are: Jagat 3,00,000 and Kamal 2,00,000. During
Calculate the value of Goodwill of the Firm by Capitalisation Method.
(b) 5,00,000
(d) 2,50,000
(a) *2,00,000
(c) 3,50,000​

Answer 1

Answer:

capitalized value = average profit × 100/rate of return

= 1,50,000×100/20 = 7,50,000

net assets= 5,00,000

goodwill= 7,50,000-5, 00,000= 2,50,000