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Question 42 Chapter 3 of +2-A
42. On 1st April, 2018, a firm had assets of 1,00,000 excluding stock of 20,000. The current liabilities were 10,000 and the balance constituted Partners' Capital Accounts. If the normal rate of return is 8%, the Goodwill of the firm is valued of 60,000 at four years' purchase of super profit, find the actual profits of the firm.
| Total Assets of the firm | = | Sundry Assets + Stock |
| = | 1,00,000 + 20,000 | |
| = | 1,20,000 | |
| Capital Employed | = | Total Assets- Current Liabilities |
| = | 1,20,000 - 10,000 | |
| = | 1,10,000 |
| Normal Profit | = | Capital Employed | X | Normal Rate of Return |
| 100 |
| = | 1,10,000 | X | 8 |
| 100 | |||
| = | 8,800 |
| Super Profit | = | Goodwill |
| Number of years of Purchase |
| = | 60,000 |
| 4 | |
| = | 15,000 |
| Average Actual Profit | = | Super Profit + Normal Profit |
| = | 15,000 + 8,800 | |
| = | 23,800 |
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Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "Q.No.42 | Chapter 3 – Goodwill: Nature and Valuation | T.S. Grewal 12 Class Book Keeping Part - A - Vol. 1", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to T.S. Grewal 12 Class Book Keeping Part - A - Vol. 1.
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