Question

If normal profit is $Rs.50000$, average profit is $Rs.75000$ than calculate Goodwill for $2$ years of purchase under super profit method_______.

• A. $Rs.45000$
• B. $Rs.50000$
• C. $Rs.55000$
• D. $Rs.48500$

Answer 1

The correct option is B $Rs.50000$

Goodwill = Super Profit x no. of years of purchase.
Super Profit = Avg profit - Normal profit.
= $Rs.75000$ - $Rs.50000$ = $Rs.25000$.
Goodwill = $Rs.25000$ x $2$ = $Rs.50000$