Super Profit Methods

From the figures given in Illustration 16, calculate goodwill according to the Capitalisation of Super Profit Method.

Average profit of GS & Co. is 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.

A business has earned average profit of Rs. 1,00,000 during the last few years and the normal rate of return in similar business is 10% . Find out the value of Goodwill by: (i) Capitalisation of Super Profit Method, and (ii) Super Profit Method if the goodwill is valued at 3 years' purchase of super profit. Assets of the business were Rs. 10,00,000 and its external liabilities Rs. 1,80,000.

A business has earned average profit of Rs. 8,00,000 during the last few years and the normal rate of return in similar business is 10% . Find value of goodwill by: (i) Capitalisation of Super Profit Method, and (ii) Super Profit Method if the goodwill is valued at 3 years' purchase of super profit. assets of the business were Rs. 80,00,000 and its external liabilities Rs. 14,40,000.

A business has earned average profit fo Rs. 4,00,000 during the last few years and the normal rate of return in similar business is 10% . Find value of goodwill by: (i) Capitalisation of Super Profit Method, and (ii) Super Profit Method if the goodwill is valued at 3 years' purchase of super profits. Assets of the business were Rs. 40,00,000 and its external liabilities Rs. 7,20,000.

Average profit of the firm is Rs. 1,50,000. Total tangible assets in the firm are Rs. 14,00,000 and outside liabilities are Rs. 4,00,000. In the same type of business, the normal rate fo return is 10% of the capital employed. Calculate value fo goodwill by Capitalisation of Super Profit Method.

J and K are partners in a firm. Their capitals are: j Rs. 3,00,000 and K Rs. 2,00,000. During the year ended 31st March, 2010 the firm earned a profit of Rs. 1,50,000. Assuming that the normal rate of return is 20% , calculate the 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.

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.