Accountancy, asked by bheemchota2004, 11 months ago

The following information relates to a partnership firm:
(a) Profits / Losses for the last six years:
1st Year Rs.20,000 Profit
2nd Year Rs.60,000 Profit
3rd Year Rs.10,000 Loss
4th Year Rs.60,000 Profit
5th Year Rs.50,000 Profit
6th Year Rs.72,000 Profit
(b) Average Capital Employed is Rs2,00,000
( c) Rate of Normal Profit is 15%

Find out the value of goodwill on the basis of:
(i) 4 years’ purchase of average profits
(ii) 4 years’ of super profits
(iii) Capitalisation of Super profits​

Answers

Answered by ItsRitam07
46

Answer:

Average Profit = ₹20,000+₹60,000-₹10,000+₹60,000+₹50,000+₹72,000/6 = ₹42,000

(i) Value of goodwill under 4 years' purchase of average profits =

₹42,000 × 4 years' purchase

₹1,68,000

Average capital employed = ₹2,00,000

Normal rate of return =15%

Hence, Normal profit =

₹2,00,000 × 15/100 = ₹30,000

Therefore,

Super Profit = Average Profit - Normal Profit

= ₹42,000 - ₹30,000

= ₹12,000

(ii) Value of goodwill under 4 years' purchase of super profit =

₹12,000 × 4 years purchase

₹48,000

(iii) Value of goodwill under capitalisation of super profit =

₹12,000 × 100/15 = ₹80,000

(iv) Value of goodwill under capitalisation of average Profit = ₹42,000 × 100/15 - ₹2,00,000

₹2,80,000 - ₹2,00,000

₹80,000

Answered by asneh718
1

Explanation:

{Adding all profits/losses}:- 2,52,000/6 = 42,000(Avg )

i) avg. profit= 42,000×4=1,68,000

ii) to find super profit is equal to

>normal profit:- 30,000 (2,00,000×15/100)

>super profit:- 42,000 - 30,000 =12,000

>goodwill 12,000 x 4 = 48,000

iii) 12,000 × 100/15= 80,000

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