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From the figures given in Illustration 1...

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

Text Solution

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Capital Employed = Assets - Liablities
= Rs. 9,70,000 - Rs. 4,00,000 = Rs. 5,70,000
Super Profit = Average Profit - Normal Profit
= Rs. 72,000 - Rs. 57,000 (10 % of Rs. 5,70,000)
= Rs. 15,000
Goodwill = Super Profit `xx (100)/("Normal rate of return")`
`= 15,000 xx (100)/(10)=` Rs. 1,50,000.
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