Capital of Meena and Manju's firm is ? 4,00,000 and expected rate of return is 10 %. Last three
year's profits are 1,20,000, * 1,10,000 and * 1,00,000 respectively. Compute the value of goodwill
two times of super profit on the basis weighted average method..
From the following information of Nairutva and Rutvik's firm determine the value of goodwill of
the basis of canitalisation of weighted average profit method.
Answers
தபயளவதபபடலீகீஎஏலலிஈஊசரலேச
Explanation:
(A) goodwill= super profit × no. of years purchases
super profit=weighted average profit -normal profit
normal profit= average capital employed × rate of return
= 4,00,000×10/100
=4,00,000×1/10
normal profit =40,000
weighted average profit = (1×1,20,000+2× 1,10,000+ 3×1,00,000)/1+2+6
=(1,20,000+2,20,000+3,00,000)/6
weighted average profit method=106667
super profit=106667-40000=66667
goodwill=66667×2=1,33,334
(B) goodwill= capitalised value -capital employed
capitalised value =weighted average profit × 100/rate of return
=106667× 100/10
=1066670
goodwill=1066670-400000=6,66,670