The capital of the firm of Anu and Benu is Rs. 1,00,000 and the market rate of interest is 15%. Annual salary to partners is Rs. 6,000 each. The profits for the last 3 years were Rs. 30,000, Rs. 36,000 and Rs. 42,000. Goodwill is to be valued at 2 years purchase of the last 3 years’ average super profits. Calculate the goodwill of the firm.

Explanation

`{:("Interest on capital",=,100000 xx (15)/(100),=,Rs. 15000....(i)),("Add: partner's salary",=,Rs. 6000 xx2,=, Rs 12000....(ii)):}`
`{:("Normal Profit" (1+ii),=,Rs.27000),("Average Profit",=,Rs. 30000 +Rs. 36000+ Rs. 42000 = Rs. (108000)/(3)),(,=,Rs. 36000),("Supper Profit",=,"Average Profit-Normal Profit"),(,=,Rs.36000 -Rs.27000),(,,Rs.9000),("Goodwill",=,"Super Profit" xx "No of years' purchase"),(,=,Rs. 9000 xx 2),(,=,Rs. 18000 ):}`