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Ajeet and Baljeet are partners in a firm...

Ajeet and Baljeet are partners in a firm. Their capitals are Rs. 9,00,000 and Rs. 6,00,000 respectively. During the year ended 31st March, 2019 the firm earned a profit of Rs. 4,50,000. Assuming that the normal rate of return is `20%`, calculate value of goodwill of the firm:
(i) By Capitalisation Method, and
(ii) By Super Profit Method if the goodwill is valued at 2 years' purchase of super profit.

Text Solution

Verified by Experts

The correct Answer is:
Goodwill - (i) Rs. 7,50,000; (ii) Rs. 3,00,000.
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TS GREWAL-GOODWILL: NATURE AND VALUATION-Exercise
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