192

You visited us 192 times! Enjoying our articles? Unlock Full Access!

Byju's Answer

Standard X

Mathematics

Basic Formulae

Capital of th...

Question

Capital of the firm of Sharma and Verma is Rs. $2, 00, 000$ and the market rate of interest is $15$ . Annual salary to partners is rs. $12, 000$ each. the profits for the last three years were $R s .60, 000, R s . 72, 000$ and $R s .84, 000$ . Goodwill is to be at $2$ years purchase of last $3$ years average super profit. calculate goodwill of the firm.

Open in App

Solution

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

Suggest Corrections

Similar questions

Q. Capital of the firm of Sharma and Verma is ₹ 2,00,000 and the market rate of interest is 15%. Annual salary to partners is ₹ 12,000 each. The profits for the last three years were ₹ 60,000; ₹ 72,000 and ₹ 84,000. Goodwill is to be valued at 2 years' purchase of last 3 years' average super profit.
Calculate goodwill of the firm.

Q. The total capital of the firm of Sakshi, Mehak and Megha is Rs.

1, 00, 000

and the market rate of interest is

15

. The net profits for the last

3

years were Rs.

30, 000, R s . 36, 000

and

R s . 42, 000

. Goodwill is to be be valued at

2

years purchase of the last

3

years super. Calculate the goodwill of the firm.

A, B and C share profits in the ratio 14:5:6. The goodwill of the firm is valued at 2 years' purchase of average profits of last 3 years. The profits of last 3 years are : Rs. 50,000; Rs. 55,000; Rs. 60,000. Calculate the value of goodwill.

Q. The goodwill of a firm is valued at

R s . 1, 35, 000

3

years purchase of super profit. Determine the missing values:
Average Profit

= \frac{3, 60, 000}{3} = R s . 1, 20, 000

Normal Profit

= R s . . . . \times \frac{15}{100} = R s . . . .

Super Profit

=

Average Profit

-

Normal Profit

= R s . 1, 20, 000 - R s . . . . = R s . . .

Goodwill

=

Super Profit

\times

No. of years Purchase.

Q. From the following information, calculate value of goodwill of the firm:
(i) At three years purchase of Average Profit.
(ii) At three years purchase of Super Profit.
(iii) On the basis of capitalisation of Super Profit.
(iv) On the basis of capitalisation of Average Profit.
Information:
(a) Average Capital Employed is Rs.

6, 00, 000

.
(b) Net profit/(Loss) of the firm for the last three years ended are:

31^{s t}

March,2018 - Rs.

2, 00, 000

31^{s t}

March,2017 - Rs.

1, 80, 000

and

31^{s t}

March,2016 - Rs.

1, 60, 000

10

.
(d) Remuneration of Rs

1, 00, 000

to partners is to be taken as charge against profit.
(e) Assets of the firm (excluding goodwill, fictitious assets and non-trade investments) is Rs.

7, 00, 000

whereas Partner's capital is Rs.

6, 00, 000

and outside Liabilities Rs.

1, 00, 000

Join BYJU'S Learning Program