Tom, Harry and George are partners sharing profits in the ratio 3:2:1. They decided to share future profits in equal ratio. Goodwill for this purpose is to be calculated as follows: -
2017-18 Rs. 3,80,000 2018-19 Rs. 4,40,000
2019-20 Rs. 5,00,000
The capital employed in the firm throughout the above-mentioned period has been Rs. 8,00,000. Having regard to the risk involved. 15% is considered to be a fair return on the capital. The renumeration of all the partners during this period is estimated to be Rs. 2,00,000 per annum. Calculate the value of goodwill by taking two years purchase of super profit.
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