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Capital of the firm of Sharma …

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Capital of the firm of Sharma and Verma is rupees 200000 and the market rate of interest is 15%. annual salary of partners is rupees 12000 each. the profit for the last three years 60000; rupees 72000; 84000. Goodwill is to be valued at to be valued at 2 years purchase of last 3 years average super profit. calculate Goodwill of the firm.

Posted by Aanchal Bamrara 5 years, 4 months ago

CBSE > Class 12 > Accountancy

2 answers

Aanchal Bamrara 5 years, 4 months ago

Yr samaj ni aara ye q

Gaurav Seth 5 years, 4 months ago

Calculation of goodwill under super profit basis:

Net profit of last three years:

1st year = Rs. 60000 - Rs. 24000 (24000 being annual salary of rs. 12000 to each partner) = Rs. 36000

2nd year = Rs. 72000 - Rs. 24000 = Rs. 48000

3rd year = Rs. 84000 - Rs. 24000 = Rs. 60000

Average profit = Total net profit/ No. of years

Average profit = Rs. (36000 + 48000 + 60000)/3 years

Average profit = Rs. 144000/ 3 = Rs. 48000

Normal profit = Capital employed * rate of interest

Normal profit = Rs. 200000 * 15% = Rs. 30000

Super profit = Average profit - Normal profit

Super profit = Rs. (48000 - 30000) = Rs. 18000

Goodwill = Super profit * No. of year's purchase

Goodwill = Rs. 18000 * 2 years

Goodwil = Rs. 36000

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