Question

If average capital employed in a firm is Rs 12,00,000 , actual profit is Rs 1,50,000 and Normal rate of return is 10% per annum . The amount of super profit will be ______

Answer 1

Answer:

Explanation:

Here is the solution

Answer 2

Answer:

The amount of super profit will be ₹30000

Explanation:

Super Profit:

Super profit is the excess of estimated future profit than the normal profit. It is a way of determining the extra profits that are earned by the business. It is helpful and influential in calculating the goodwill of a firm by capitalization and other methods.

Given:

Average capital employed by the firm: ₹1200000
Actual profit= ₹150000
The normal rate of return= ₹10%
Now,
Normal profit= Normal rate of return × Capital employed
= 10%×1200000
= ₹120000

Now,

Super profit= Actual profit - Normal profit
= 150000 - 120000
= ₹30000

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