1.

Ajeet and Baljeet are partners in a firm. Their capitals are ₹ 9,00,000 and ₹ 6,00,000 respectively. During the year ended 31st March, 2019 the firm earned a profit of ₹ 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.

Answer» Ajeet and Baljeet are partners in a firm. Their capitals are ₹ 9,00,000 and ₹ 6,00,000 respectively. During the year ended 31st March, 2019 the firm earned a profit of ₹ 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.


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