The Summarised Balance Sheet of Green Private Ltd, as at 31.03.2020 is given below:
Particulars
₹
40.000
24.000
Share Capital : Equity shares of * 10 each
Reserves and surplus
Long-term borrowings : 5% Debentures
Creditors
10.000
10.450
33.900
Tangible assets
4% Investment (Face value 8.000)
7.200
Inventories
16.000
Debtors
19.350
Cash and bank
8,000
The net earnings for the last three years were as follows:
Year ended 31.03.2018 : * 10,100; Year ended 31.03.2019 : * 10,850; Year ended 31.03.2020 : + 12.200
You are required to ascertain the value of goodwill at 3 years' purchase of super profit (take simple
average profit) assuming normal rate of return on capital employed at 10%. Ignore income tax.
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Answer:
Share Capital : Equity shares of * 10 each
Reserves and surplus
Long-term borrowings : 5% Debentures
Creditors
10.000
10.450
33.900
Tangible assets
4% Investment (Face value 8.000)
7.200
Inventories
16.000
Debtors
19.350
Cash and bank
8,000
The net earnings for the last three years were as follows:
Explanation:
i hope it is right
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