The capital of the firm of Anuj and Binu is 10 lakh in the market rate of interest is 15% annual salary to the partner is 60000 each and the profit for the last three years work 280000 ,380000, 420000.Goodwill of the firm is to be valued on the basis of 2 years purchase of last three years average super profit calculate the Goodwill of the firm.
Answers
Answer:
here we will calculate average profit as we calculate and subtract 360000 as it the salary of partner for 3 year.
Goodwill of the firm will be Rs. 180,000
Given: Profits of past three years and interest of salary rate.
To Find: Goodwill of the firm.
Solution :
Goodwill refers to the image or reputation of the firm earned over the years. It can be estimated in monetary terms.
Let the three years be 2019, 2020and 2021.
Therefore,
2019 2020 2021
Profits 280,000 380,000 420,000
LESS: Salary 120,000 120,000 120,000
160,000 260,000 300,000
Average Profit = 160,000 + 260,000 + 300,000
3
= Rs. 2,40,000
Normal Profit = Capital Employed * NRR/100
= 10,00,000 * 15/100
= Rs 1,50,000
Also,
Super Profit = Average Profit - Normal profit
= 2,40,000 - 1,50,000
= Rs 90,000
Goodwill = 90,00 * 2
= Rs. 180,000
#SPJ2