Capital employed in a business is 1,50,000 profit are 50,000 and the normal rate of profit is 20%.The amount. Of goodwill as per capitalized method will be
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Answer:
goodwill = 1,00,000
Explanation:
total business value = average profit ÷ nrr
TBV = 50,000/20% = 2,50,000
capital employed = 1,50,000
goodwill = TBV - capital employed
= 2,50,000 - 1,50,000 = 1,00,000
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