Question

From the following details, calculate the value of goodwill. (a) Average capital employed in the business Rs. 6,00,000 (b) Net trading profit for the three years Rs. 1,07,600; Rs. 90,700; Rs. 1,12,500. (c) Rate of interest expected from capital at 12%. (d) Remuneration to the partners for their services Rs. 12,000 per annum. (e) Sundry assets of the firm Rs. 7,65,429 and Sundry liabilities Rs. 34,123.​

Answer 1

Answer:

786

Explanation:

kya the cost of the present mam

6

Answer 2

Given:

(a) Average capital employed in the business Rs.6,00,000

(b) Net trading profit for the three years Rs.1,07,600; Rs.90,700; Rs.1,12,500. (c) Rate of interest expected from capital at 12%.

(d) Remuneration to the partners for their services Rs12,000 per annum.

(e) Sundry assets of the firm Rs.7,65,429 and Sundry liabilities Rs.34,123.​

To Find:

From the following details, calculate the value of goodwill.

Solution:

Calculation of goodwill by the capitalization of super profit,

$G/W=\frac{SP*100}{NROR} \\SP=adjusted avg. profit-normal profit\\Normal profit=capitalemployed*NRR$

using the above formula first we will calculate the avg profit, which will be

$Avg profit=\frac{107600+90700+112500}{3} \\=103600$

Now calculating adjusted average profit,

$AAP=avg.profit-remuneration paid\\=103600-12000\\=91600$

Now calculation of normal profit,

$normal profit=600000*12\%\\=72000$

Calculation of super profit,

$SP=91600-72000\\=19600$

Now calculation of goodwill will be,

$G/W=\frac{19600*100}{12}\\=163333$

Hence, the value of goodwill is Rs163333.