kabir and Reshma ara partners in a firm sharing profits and losses in the ratio of 4:1Their balance sheet as on31 Mar 2019 is as follows
Answers
Answer:
It can be used for writing off capital losses. ( D) It is part ... P and Q were partners in a firm sharing profits in the ratio of 5 : 3. ... On 31st March, 2018, their Balance Sheet was as follows: ...
Answer:
Super Profit Method: This method is used to measure the value of goodwill of a firm.
Explanation:
From the above question,
They have given :
The methods of valuation of goodwill in this case are:
1. Super Profit Method: This method is used to measure the value of goodwill of a firm. Here, the profits earned by the firm are calculated on the basis of the average profits made over a period of time. The super profits are then calculated by subtracting the normal profits from the total profits. The Goodwill is then valued by multiplying the super profits by a multiplier.
2. Capitalization of Earnings Method: This method is used to measure the value of goodwill of a firm. Here, the average profits earned by the firm over a period of time are taken into consideration. The average profits are then capitalized to calculate the value of the goodwill.
3. Super Royalty Method: This method is used to measure the value of goodwill of a firm. Here, the average royalty amount paid by the firm over a period of time is taken into consideration. The average royalty amount is then multiplied by a multiplier to calculate the value of the goodwill.
4. Asset Based Method: This method is used to measure the value of goodwill of a firm. Here, the assets of the firm are taken into consideration. The value of the assets is then multiplied by a multiplier to calculate the value of the goodwill.
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