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Varuna and Karuna are partners for equal...

Varuna and Karuna are partners for equal shares. They admit Lata into partnership for 1/4th share. It was agreed to value goodwill fo the firm at 4 years' purchase fo super profit. Normal rate of return is `15%` of the capital employed. Average profit of the firm is Rs. 4,00,000. Balance Sheet of the firm as at 31st March, 2019 was as follows:

Calculate the value of goodwill.

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Verified by Experts

The correct Answer is:
Goodwill - Rs. 7,00,000.
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TS GREWAL-GOODWILL: NATURE AND VALUATION-Exercise
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  14. A business has earned average profit fo Rs. 4,00,000 during the last f...

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  15. A firm earns profit of Rs. 5,00,000. Normal Rate of Return in a Simila...

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