On 1st April, 2014 a firm had assets of Rs. 1,00,000 excluding stock of Rs. 20,000. Partners' Capital Accounts showed a balance of Rs. 60,000. The current liabilities were Rs. 10,000 and the balance constituted the reserve. If the normal rate of return is 8%, the 'Goodwill' of the firm is valued at Rs. 60,000 at four years purchase of super profit, find the average profit of the firm.

Answer

Average Profit Rs. 23,800.

Explanation

`{:("Capital Employed",=,"Total Assets - Current Liabilites"),(,,"Rs. 1,20,000 - Rs. 10,000 = Rs. 1,10,000"):}`