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The average profit earned by a firm is ₹ 7,50,000 which includes overvaluation of stock of ₹ 30,000 on an average basis. The capital invested in the business is ₹ 4,20,000 and the normal tare of return is 15%. Calculate goodwill of the firm on the basis of 3 time the super profit. |
| Answer» N:Average Profit earned by a firm = Rs. 7,50,000 Undervaluation of Stock = Rs.30,000 Average Actual Profit = Average Profit earned by a firm + Undervaluation of Stock = 7,50,000 + 30,000 = Rs. 7,20,000 Normal Profit = Capital INVESTMENT X = 4,20,000 x = 6,30,000Super Profit = Actual Average Profit - Normal Profit = 7,20,000 - 6,30,000 = Rs.90,000 Goodwill = SUPER Profit x Number of Times = 90,000 x 3 = Rs.2,70,000 | |