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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Sakshi and Megha were partners sharing profits and losses in the ratio of 3 : 1. Capital employed as on 31st March, 2024 was ₹14,00,000. Profit earned on an average is ₹1,80,000. Calculate the goodwill of the firm on the basis of 5 years’ purchase of super profits, if the normal rate of return is 10%.
Normal Profit = ₹14,00,000 × 10% = ₹1,40,000.
Super Profit = Average Profit – Normal Profit = ₹1,80,000 – ₹1,40,000 = ₹40,000.
Goodwill = ₹40,000 × 5 = ₹2,00,000.
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 "T.S. Grewal Class 12 Chapter 2 Q.12 - Nature and Valuation of Goodwill", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 2 - Nature and Valuation of Goodwill.
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
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