Question

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42. Ajeet and Baljeet are partners in a firm. Their capitals are 9,00,000 and 6,00,000 respectively.during the
year ended 31st March, 2020 the firm earned a profit of 4,50,000. The normal rate of return is 20%.
calculate value of goodwill of the firm:
(i) By Capitalisation Method; and
(ii) By Super Profit Method if the goodwill is valued at 2 years' purchase of super profit.​

Answer 1

Answer:

Explanation: firstly, find the avg. profit and normal rate of return(NRR).

Divide avg. profit by NRR.

find the actual capital by (assets - liabilities).

then, goodwill = capital employed - actual capital

capital employed = avg. profit/ NRR.