Question

Q1.
A business has earned average profit of Rs. 8,00,000 during the last few years and the normal rate of return
in similar business is 10%. Find value of goodwill by:
Capitalisation of Super Profit Method, and
Super Profit Method if the goodwill is valued at 3 years purchase of super profits.
Assets of the business were Rs. 60,00,000 and its external liabilities Rs. 10,00,000.​

Answer 1

Answer:

during the last few years and the normal rate of return

in similar business is 10%. Find value of goodwill by:

Capitalisation of Super Profit Method, and

Super Profit Method if the goodwill is valued at 3 years purchase of super profits.