- Capital employed x Normal rate of return-100A- Super profitB- Average profitC- Gross profitD- Normal profit

You visited us 1 times! Enjoying our articles? Unlock Full Access!

Byju's Answer

Standard XII

Accountancy

Super Profit Method

= Capital emp...

Question

= Capital employed x Normal rate of return/100

Super profit

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Average profit

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Gross profit

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Normal profit

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Open in App

Solution

The correct option is D Normal profit
Normal profit = Capital employed x Normal rate of return/100
where,
capital employed =
total assets (excluding goodwill) - external liabilities

Suggest Corrections

Similar questions

The capital employed of a business is 1,20,000. The normal rate of return is 10%. A firm is able to earn an average profit of 15,000. Calculate Super Profits.

Q. Average profit of GS & Co. is ₹ 50,000 per year. Average capital employed in the business is ₹ 3,00,000. If the normal rate of return on 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.

Q. Average profit of GS &Co. Rs.

50, 000

per year. Average capital employed in the business is Rs.

3, 00, 000

. If the normal rate of return on 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.

Q. Capital employed by a partnership firm is

R s .1, 00, 000

. Its average profit is

R s .20, 000

. Normal rate of return is

15 %

. Value of goodwill is _________.

Q. Average profit of the firm is Rs.

2, 00, 000

. Total assets of the firm are Rs.

15, 00, 000

whereas Partner's Capital is Rs.

12, 00, 000

. If normal rate of return in a similar business is

10

of the capital employed, what is the value of goodwill by Capitalisation of Super Profit?

Join BYJU'S Learning Program

= Capital employed x Normal rate of return/100

The correct option is D Normal profitNormal profit = Capital employed x Normal rate of return/100 where, capital employed = total assets (excluding goodwill) - external liabilities

The correct option is D Normal profit
Normal profit = Capital employed x Normal rate of return/100
where,
capital employed =
total assets (excluding goodwill) - external liabilities