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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
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Question 48 Chapter 3 of +2-A
From the following information, calculate value of goodwill of the firm:
i) Calculation of Goodwill with average Profit
Number of years of purchase= 3
| Goodwill | = | Average Profit*1 X Number of years of purchase |
| = | 80,000 X 3 | |
| = | 2,40,000 |
ii) At three years' purchase of Super Profit.
Number of years’ purchase = 3
| Goodwill | = | Average Profit*1 X Number of years of purchase |
| = | 20,000 X 3 | |
| = | 60,000 |
iii) On the basis of Capitalisation of Super Profit.
| Goodwill | = | Super Profit *2 | X | 100 |
| Normal Rate of Return |
| = | 20,000 | X | 100 |
| 10 | |||
| = | 2,00,000 |
iv) On the basis of Capitalisation of Average profit
| Capitalized value of Profit | = | Average Profit*1 | X | 100 |
| Normal Rate of Return |
| = | 80,000 | X | 100 |
| 10 | |||
| = | 8,00,000 |
| Goodwill | = | Capitalized value of Profit - Actual Capital |
| = | 8,00,000 - 6,00,000 | |
| = | 2,00,000 |
Working Notes : -
*1 Calculation of Adjusted Average Profit
| Average Profit | = | Adjusted Profit for past given years*1 |
| Number of years |
| = | 2,00,000 + 1,80,000 + 1,60,000 |
| 3 | |
| = | 5,40,000 |
| 3 | |
| = | 1,80,000 |
| Adjusted Average Profit | = | Average Profit − Remuneration |
| = | 1,80,000 -1,00,000 | |
| = | 80,000 |
*2 Calculation of Super Profit
| Capital Employed | = | Total Assets- Outsiders Liabilities |
| = | 7,00,000 - 1,00,000 | |
| = | 6,00,000 |
| Normal Profit | = | Capital Employed | X | Normal Rate of Return |
| 100 |
| = | 6,00,000 | X | 10 |
| 100 | |||
| = | 60,000 |
| Super Profit | = | Actual Profit*1 - Normal Profit |
| = | 80,000 - 60,000 | |
| = | 20,000 |
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
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.48 | 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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