From the following information, calculate the value of goodwill by super profit method. Average Capital employed in the business Rs.7,00,000. Net trading profit of the firm for the past three years Rs.1,47,600, Rs.1,48,100 and Rs.1,52,500. Rate of Interest expected from capital having regard to the risk involved —18%. Fair remuneration to the partners for their services 12,000 per annum. Sundry Assets (excluding goodwill) of the firm Rs.7,54,762. Sundry Liabilities Rs.31,329. Goodwill valued at 2 years’ purchase.
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From the following information, calculate the value of goodwill by super profit method. Average Capital employed in the business Rs.7,00,000. Net trading profit of the firm for the past three years Rs.1,47,600, Rs.1,48,100 and Rs.1,52,500. Rate of Interest expected from capital having regard to the risk involved —18%. Fair remuneration to the partners for their services 12,000 per annum. Sundry Assets (excluding goodwill) of the firm Rs.7,54,762. Sundry Liabilities Rs.31,329. Goodwill valued at 2 years’ purchase.
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