from the following details , calculate goodwill of the firm :
average profit of the firm - ₹81000
capital of the firm: ₹3, 00,000 ,
normal rate of return -20% .
calculate goodwill at 2 year's purchase of super profit
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Answer:
Average Profit = 81000
Normal Profit = 300000 * 20/100 = 60000
Super Profit = Actual Profit - Normal Profit
= 81000 - 60000 = 21000
Goodwill = 21000* 2 = 42000
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