Question

Total assets of a firm including fictitious assets of Rs5000 are 85000.The net liabilities of the firm are Rs30000.The normal rate of return is10 percent and the average profits of the firm are Rs8000.Calculate the goodwill as per Capitalisation of super profits​

Answer 1

Answer:

20,000

Explanation:

1.average profit=8,000

2.capital employed=assets-liabilities

=90,000-30,000

=60,000

3.normal profit=capital employed×normal rate/100

=60,000×10/100

=6,000

4.super profit=average profit-normal profit

=8,000-6,000

=2,000

5.goodwill=super profit×100/normal rate

=2,000×100/10

=20,000