e Question:Ayub and Amit are partners in a firm and they admit Jaspal into partnership w. e. f. 1st April, 2018. They agreed to value goodwill at 3 years purchase of Super Profit Method for which they DECIDED to average profit of last 5 years. The profit for the last 5 years were:YEAR Ended                        Net Profit  31st March, 2014                1,50,000 31st March, 2015                1,80,000 31st March, 2016                1,00,000( Including abnormal loss of L 1,00,000) 31st March, 2017                2,60 000 ' (Including abnormal gain (profit) of 40,000) 31st March, 2018                2,40,000  The firm has total assets of ₹ 20,00,000 and OUTSIDE Liabilities of ₹ 5,00,000 as on that date. Normal Rate of Return in similar business is 10%. Calculate value of goodwill. Solution:1.                              Calculation Of Normal Profits (31" March)  Years               2014         2015         2016          2017          2018Profit /Loss    1,50,000  1,80,000   1,00,000   2,60,000    2,40,000Adjustment      ---              ---            1,00,000   (40.000)        ---Normal Profit  1,51000    1,80,000     2,00,000  2,20,000   2,40,000  Total of Normal Profit = 1,50,000 + 1,80,000 + 2,00,000 + 2,20,000 + 2,40,000                                    = Rs.9,90,000  2. Calculation of Capital Employed Capital employed = Total Assets - Outside liabilities Capital employed = Rs.20,00,000 - Rs.5,00,000 = Rs.15.00,000  3. Calculation Super Profit Average Profit =                           =                         = 1, 98, 000    Normal  Profit = Capital Employed x  Normal  Profit = 15, 00, 000 x = 1, 50, 000  Super Profit = Average Profit - Normal Profit Super Profit = 1,98,000 - 1,50,000 = 48,000 Goodwill = Super Profit x Number of Year Purchase                = 48,000 x 3 = Rs.1,44,000