1.

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


Discussion

No Comment Found

Related InterviewSolutions