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

Byju's Answer

Other

Quantitative Aptitude

Averages

Gupta and Bos...

Question

Gupta and Bose had a firm in which they had invested Rs. $50, 000$ . On a average, the profits were Rs. $16, 000$ . The normal rate in the industry is $15$ . Goodwill is to be valued at four years purchase of profits in excess of profits @ $15$ on the money invested. Find the value of the goodwill.

Open in App

Solution

Step 1: Calculation of Normal Profit:
Normal Profit=[Capital employed* Normal rate of Return]
= 50000* [15/100]
= 7500
Step 2: Calculation of average profit
Average profit= 16000

Step 3: Calculation of super profit
Super profit= Average profit- Normal profit
= 16000- 7500
= 8500
Step 4: Calculation of Goodwill
Goodwill= 8500* 4
= 34000

Suggest Corrections

Similar questions

Q. Gupta and Bose had a firm in which they had invested ₹ 50,000. On an average, the profits were ₹ 16,000. The normal rate of return in the industry is 15%. Goodwill is to be valued at four years' purchase of profits in excess of profits @ 15% on the money invested. Calculate the value 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.

A

and

B

are equal partners. They decide to admit

C

for

{\frac{1}{3}}^{r d}

share. for the purpose of admission of

C

, goodwill of the firm is to be valued at four years purchase of super profit. Average capital employed in the firm is Rs.

1, 50, 000

. Normal rate of return may be taken as

15

p.a. Average profit of the firm Rs.

40, 000

. Calculate value of goodwill.

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. Goodwill is to be valued at three year's of average profit. Profit for past four years ending on

31^{s t}

March of the firm were:

2015 - R s 12, 000; 2016 - R s 18, 000; 2017 - R s 16, 000; 2018 - R s 14, 000

Calculate amount of Goodwill.

Join BYJU'S Learning Program

Gupta and Bose had a firm in which they had invested Rs. 50,000. On a average, the profits were Rs. 16,000. The normal rate in the industry is 15. Goodwill is to be valued at four years purchase of profits in excess of profits @15 on the money invested. Find the value of the goodwill.

Gupta and Bose had a firm in which they had invested Rs. $50, 000$ . On a average, the profits were Rs. $16, 000$ . The normal rate in the industry is $15$ . Goodwill is to be valued at four years purchase of profits in excess of profits @ $15$ on the money invested. Find the value of the goodwill.