A firm runs by Akhil, Nikhii and Mukil earns a net profit of Rs. 12,00

1.	A firm runs by Akhil, Nikhii and Mukil earns a net profit of Rs. 12,000/- per year. Normally the firms in same type of business earns at a rate of 10%. If the firm’s total assets are of Rs. 1,50,000/- and external liabilities are for Rs. 50,000, what will be its value of Goodwill?
Answer» Value of goodwill = Total value of business – Net assets Total value of business Net Assets = Assets – Liabilities = 1,50,000 – 50,000 = 1,00,000 Goodwill = 1,20,000 -1,00,000 = 20,000

A firm runs by Akhil, Nikhii and Mukil earns a net profit of Rs. 12,000/- per year. Normally the firms in same type of business earns at a rate of 10%. If the firm’s total assets are of Rs. 1,50,000/- and external liabilities are for Rs. 50,000, what will be its value of Goodwill?

Answer»

Value of goodwill = Total value of business – Net assets

Total value of business Net Assets = Assets – Liabilities

= 1,50,000 – 50,000

= 1,00,000

Goodwill = 1,20,000 -1,00,000 = 20,000