Question

(Super Profit Method) Calculate goodwill at two years purchase of super profits.
1. Normal Rate of return -10%.
2. Assets : Machinery * 2,00,000 Building 3,00,000; Stock * 70,000; Debtors 25,000 :
Provision for Doubtful debts 5,000; Preliminary Expenses 10,000.
3. Liabilities: Creditors 20,000 Bank Loan 40,000.
4. Profits : Ist year 80,000; IInd year 1,05,000; IIIrd year 90,000.
5. Charge depreciation at 10% p.a. on building in IIIrd year.
(Ans. Goodwill * 65,334]
building.
Hint : Deduct depreciation on building @ 10% from IIIrd year profits and also from​

Answer 1

Answer:

your answer was this

Explanation:

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Answer 2

super profit method is the easiest method tp calculate goodwill