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On 1s' April 2016, an existing firm had assets of Rs. 10,00,000 including cash of Rs.20,000. Its creditors amounted to Rs. 50,000 on that date. The partner's capitalaccounts showed a balance of Rs. 8,00,000 while the reserve fund amounted to Rs.1,50,000. If the normal rate of return is 15% and the goodwill of the firm valued atRs. 1,80,000 at 3 years purchase of super profit, find the average profit of the firm.A firm has Current ratio of 3.5:1 and quick ratio of 2:1. Assuming Inventory at Rs.30,000. What will be the amount of Current Assets, Quick Assets? |
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Answer» Answer: Step 1: Calculation of Capital Employed: Capital Employed= TOTAL assets- CREDITORS = 75000-5000 = 70000 Step 2: Calculation of Normal PROFIT: Normal Profit= Capital Employed* [Normal Rate Of Return/100] = 70000* [20/100] = 14000 Step 3: Calculation of Super Profit from GOODWILL: Super Profit= Goodwill/ Number of year's of purchase = 24000/4 = 6000 Step 4: Calculation of AVERAGE Profit from Super Profit: Average Profit= Super Profit+ Normal Profit = 14000+6000 = 20000please mark me as brainliest please |
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