Q.11 The Capital Employed is Rs.200000/-, Average profit for last 3yea

1.	Q.11 The Capital Employed is Rs.200000/-, Average profit for last 3years is Rs. 40000/- & the normalrate of return is 15% Calculate thegoodwill at 4 years purchase of Superprofit?
Answer» Goodwill = Rs. 40,000 Explanation: GIVEN : Capital Employed = Rs. 2,00,000/- AVERAGE profit for last 3 years = Rs. 40,000/- The Normal RATE of Return = 15 % Number of years PURCHASE = 4 years To find : CALCULATE the Goodwill Solution : Goodwill = Super Profit × No. of years Purchases Normal Profit = Capital Employed × Normal Rate of Return ⇒ 2,00,000 × 15/100 ⇒ 30,000 Normal Profit = Rs. 30,000 Super Profit = Average Profit - Normal Profit ⇒ 40,000 - 30,000 ⇒ 10,000 Super Profit = Rs. 10,000 Goodwill = Super Profit × No. of years Purchases ⇒ 10,000 × 4 ⇒ 40,000 Goodwill = Rs. 40,000 ∴ Goodwill = Rs. 40,000

Q.11 The Capital Employed is Rs.200000/-, Average profit for last 3years is Rs. 40000/- & the normalrate of return is 15% Calculate thegoodwill at 4 years purchase of Superprofit?

Answer»

Goodwill = Rs. 40,000

Explanation:

GIVEN :

Capital Employed = Rs. 2,00,000/-
AVERAGE profit for last 3 years = Rs. 40,000/-
The Normal RATE of Return = 15 %
Number of years PURCHASE = 4 years

To find :

CALCULATE the Goodwill

Solution :

Goodwill = Super Profit × No. of years Purchases

Normal Profit = Capital Employed × Normal Rate of Return

⇒ 2,00,000 × 15/100

⇒ 30,000

Normal Profit = Rs. 30,000

Super Profit = Average Profit - Normal Profit

⇒ 40,000 - 30,000

⇒ 10,000

Super Profit = Rs. 10,000

Goodwill = Super Profit × No. of years Purchases

⇒ 10,000 × 4

⇒ 40,000

Goodwill = Rs. 40,000

∴ Goodwill = Rs. 40,000

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Q.11 The Capital Employed is Rs.200000/-, Average profit for last 3years is Rs. 40000/- & the normalrate of return is 15% Calculate thegoodwill at 4 years purchase of Superprofit?​

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Q.11 The Capital Employed is Rs.200000/-, Average profit for last 3years is Rs. 40000/- & the normalrate of return is 15% Calculate thegoodwill at 4 years purchase of Superprofit?