Gupta and Bose had a firm in which they had invested ₹ 50,000. On an average, the profits were ₹ 16,000. The normal rate of return in the industry is 15%. Goodwill is to be valued at four years purchase of profits in excess of profits @ 15% on the money invested. Value th goodwill.

Gupta and Bose had a firm in which they had invested ₹ 50,000. On an

1.	Gupta and Bose had a firm in which they had invested ₹ 50,000. On an average, the profits were ₹ 16,000. The normal rate of return in the industry is 15%. Goodwill is to be valued at four years purchase of profits in excess of profits @ 15% on the money invested. Value th goodwill.
Answer» tion:Working Notes:Goodwill = Nornal profit = ACTUAL Profit = SUPER Profit = Actual Profit - Normal Profit =16,000-7,500=8,500 NUMBER of years PURCHASE =4Super Profit =8,500Goodwill = Goodwill = = 34,000

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Gupta and Bose had a firm in which they had invested ₹ 50,000. On an average, the profits were ₹ 16,000. The normal rate of return in the industry is 15%. Goodwill is to be valued at four years purchase of profits in excess of profits @ 15% on the money invested. Value th goodwill.

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