Question

ws. Vu
OL
18. (Capitalisation of Super Profit) The assets of a firm are 26,000 and liabilities other
than capital are * 6,000. The normal rate of profit in this type of business is 12 % % where
as the firm earns a profit of 8,400. Calculate the amount of goodwill on the basis o
capitalization of super profit method.​

Answer 1

Answer:

average profit = 8,400

normal profit = 26,000-6000×12/100= 2400

super profit = 8400-2400 = 6000

goodwill = 6000×100/12 = 50,000