a firm has made an avarage profit ₹60000 during the past few years.the normal rate of return in similar type of business 15%.the firm has a net tangible asset of 280000.compute the value of goodwill by capitalisatoin of profits

a firm has made an avarage profit ₹60000 during the past few years.t

1.	a firm has made an avarage profit ₹60000 during the past few years.the normal rate of return in similar type of business 15%.the firm has a net tangible asset of 280000.compute the value of goodwill by capitalisatoin of profits
Answer» :❖ If a firm has made an AVARAGE PROFIT of Rs. 60,000 during the past few years; the normal RATE of return in similar type of business is 15% and the firm has a net tangible asset of Rs. 2,80,000; then the value of goodwill by capitalisation of average profits will be Rs. 1,20,000.___________________________________________________________SOLUTION :❒ Given :- The firm has made an avarage profit of Rs. 60,000.The normal rate of return of the firm is 15%.The firm has a net tangible asset of Rs. 2,80,000.❒ To Calculate :- The value of goodwill by capitalisation of average profits = ? ____________________________________________❒ CALCULATION :- Here, Average Profit = Rs. 60,000Normal Rate of Return = 15% So, ★ Capitalised value of Average Profit = ⇒ Capitalised value of Average Profit = ⇒ Capitalised value of Average Profit = ⇒ Capitalised value of Average Profit = Rs. 4,00,000Thus,✠ TOTAL value of the firm = Capitalised value of Average Profit ➜ Total value of the firm = Rs. 4,00,000Now,Net Tangible Assets of the Firm = Rs. 2,80,000Total Value of the Firm = Rs. 4,00,000We know that, Using this formula, we get ✪ Value of Goodwill = Total Value of the Firm - Net Tangible Assets of the Firm➨ Value of Goodwill = Rs. 4,00,000 - Rs. 2,80,000∴ Value of Goodwill = Rs. 1,20,000

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a firm has made an avarage profit ₹60000 during the past few years.the normal rate of return in similar type of business 15%.the firm has a net tangible asset of 280000.compute the value of goodwill by capitalisatoin of profits

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