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.

None of the above

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Either A or B

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Credited

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Debited

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Solution

The correct option is C
Credited

Normal Profits = 1,20,000 * 10%
= 12,000

Super Profits = 15,000 - 12,000
= Rs 3,000

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Similar questions

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.

Capital employed in a business is Rs. 2,00,000. The normal rate of return on capital employed is 15%. During the year 2015 the firm earned a profit of Rs. 48,000. Calculate goodwill on the basis of 3 years purchase of super profit?

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?

Captial employed in a business is Rs. 2,00,000. The normal rate of return on capital employed in 15%. During the year 2002, the firm earned a profit of Rs. 48,000. Calculate goodwill on the basis of 3 yr purchase of super profit.

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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.

The correct option is C Credited Normal Profits = 1,20,000 * 10% = 12,000 Super Profits = 15,000 - 12,000 = Rs 3,000

The correct option is C
Credited

Normal Profits = 1,20,000 * 10%
= 12,000

Super Profits = 15,000 - 12,000
= Rs 3,000