Q.No.44 | Chapter 3 – Goodwill: Nature and Valuation | T.S. Grewal 12 Class Book Keeping Part - A - Vol. 1

Question 44 Chapter 3 of +2-A

44. Rajan and Rajani are partners in a firm. Their capitals were Rajan 3,00,000; Rajani 2,00,000. During the year 2018−19, the firm earned a profit of 1,50,000. Calculate the value of goodwill of the firm by the capitalization of super profit assuming that the normal rate of return is 20%.

The solution of Question 44 Chapter 3 of +2-A:

Normal Profit	=	Capital Employed	X	Normal Rate of Return
				100

=	5,00,000	X	20
			100
=	1,00,000

Super Profit	=	Actual Profit - Normal Profit
	=	1,50,000 - 1,00,000
	=	50,000

Goodwill	=	Super Profit	X	100
				Normal Rate of Return

=	50,000	X	100
			20
=	2,50,000

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

• Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
• Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
• Chapter No. 3 – Goodwill: Nature and Valuation
• Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
• Chapter No. 5 – Admission of a Partner
• Chapter No. 6 – Retirement/Death of a Partner
• Chapter No. 7 – Dissolution of a Partnership Firm

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 8 – Company Accounts –  Accounting for Share Capital
• Chapter No. 9 – Company Accounts – Issue of Debentures
• Chapter No. 10 – Redemption of Debentures

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 1 – Financial Statements of a Company
• Chapter No. 2 – Financial Statement Analysis 
• Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
• Chapter No. 4 – Accounting Ratios
• Chapter No. 5 – Cash Flow Statement

 

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