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Average profit of GS & amp Co. is ₹ 50,000 per year. Average capital employed in the business is ₹ 3,00,000. If the normal rate of return of capital employed is 10%, calculate goodwill of the firm by: (i) Super Profit Method at three years purchase; and (ii) Capitalisation of Super Profit Method. |
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Answer» n:(1) Goodwill = Super Profit x Numbers of Years Purchase Goodwill = 20, 000 x 3 = 60, 000 (2) Goodwill = Super Profit x Goodwill = 20, 000 x = 2 ,00, 000 Working Notes: Calculation Super Profit Average Profit = Average Profit = 50, 000 Normal Profit = Capital Employed x Normal Profit = 3, 00, 000 x -= 30, 000 Super profit = 50,000 - 30,000 =20,000 |
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