Question

On 1st April, 2018, a firm had assets of 3,00,000 including cash of 5,000. The Partners' Capital
Accounts showed a balance of 2,00,000 and the Reserve constituted the rest. If the normal rate
of return is 10% and the goodwill of the firm is valued at * 2,00,000 at four years' purchase of
super profit, find the average profit of the firm.​

Answer 1

Answer is :

On 1st April, 2018, a firm had assets of 3,00,000 including cash of 5,000. The Partners' Capital

Accounts showed a balance of 2,00,000 and the Reserve constituted the rest. If the normal rate

of return is 10% and the goodwill of the firm is valued at * 2,00,000 at four years' purchase of

super profit, find the average profit of the firm.

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