Calculate the value of Goodwill at 3 years purchase when capital employed 250000 and average profit 30000 and normal rate of return is 10%
Answers
Answered by
37
Explanation:
Solution :
★ Goodwill = Super Profit × No. of years Purchases
• Normal Profit = Capital Employed × (Normal Rate of Return/100)
= 2,50,000 × (10/100)
= 25,000
Normal Profit = 25,000
• Super Profit = Average Profit - Normal Profit
= 30,000 - 25,000
= 5,000
Super Profit = 5,000
★ Goodwill = Super Profit × No. of years Purchases
= 5,000 × 3
= 15,000
Goodwill = 15,000
Therefore, The value of Goodwill = 15,000
Answered by
20
Explanation:
Normal profit = (250000 × 10)/100
Normal profit = 25,000
Super profit = 30000 - 25,000
Super profit = 5,000
Goodwill = 5,000 × 3
Goodwill = 15,000
Hence, Goodwill = 15,000
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