Accountancy, asked by Trinika7468, 9 months ago

The average capital employed of a firm is 400000 and the normal rate of return is 15 % the average profit to the firm is 80000 per annum if the remuneration of the partner is estimated to be 10000 per annum then on the basic of two year puchase of super profit the value of the goodwill will be

Answers

Answered by eshabalu408
22

Explanation:

Total profit of firm =400000

formulas; Normal Rate of return= capital employed×Rate of return /100

Super profit=Average profit - Normal profit

Now find,

actual average profit= 80000-10000= 70000

super profit=70000-60000=10000

Goodwill= Super profit×no.of year purchase

Goodwill=10000×2=20000

20000 is a correct answer.

Similar questions