Capital investment is Rs 5,00,000. Average profit is Rs 1,50,000. Normal rate of return is 20%. Calculate the value of Goodwill under Super Profit method if the goodwill is valued at 2 years purchase. *
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average profit = 1,50,000
normal profit = 5,00,000×20/100= 1,00,000
super profit = 1,50,000-1, 00,000 = 50,000
goodwill = 50,000 × 2 = 1,00,000
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