Form the following Balance Sheet of Vinod Enterprises as at 31st March, 2019, calculate the value of goodwill by capitalisation of Super Profits, if the normal rate of return is `20%` of the Capital Employed and Average Profit is Rs. 1,50,000:

Explanation

`{:("(i) Capital Employed by Liabilities Side Approach:","Rs.","Rs."),(" Capital A/cs:" ,,),(" Vinod","2,00,000",),(" Vimal",ul("3,00,000"),"5,00,000"),(" Add: Reserves",,ul("3,00,000")),(,,"8,00,000"),(" Less: Investments being Non-trade Investments","2,00,000",),(" Good will",ul("1,50,000"),ul("3,50,000")),(,,ulul("4,50,000")):}`
`{:("(i) Capital Employed (Assets Side Approach):","Rs.","Rs."),(" Total Assets" ,,"13,50,000"),(" Less: investments (Being Non-trade)","2,00,000",),(" Goodwill",ul("1,50,000"),ul(" 3,50,000")),(,,"10,00,000"),(" Less: Bank Overdraft","2,00,000",),(" Sundry Creditors","3,00,000",),(" Outstanding Expenses",ul(" 50,000"),ul(" 5,50,000")),(,,ulul(" 4,50,000")):}`
Normal Profit = `("Capital Employed" xx "Normal Rate of Return") /(100)`
` " " ` = Rs. 4,50,000 `xx` 20/100 = Rs. 90,000
Average Profit = Rs. 1,50,000
Super Profit = Average Profit - Normal Profit
` " " ` = Rs. 1,50,000 - Rs. 90,000 = Rs. 60,000
Goodwill = `("Super Profit" xx 100)/("Normal Rate of Return")` = `(Rs. 60,000 xx 100)/(20) = Rs. 3,00,000.`