Question 11 Chapter 3 of +2- Usha
11. (Super Profit Method) A firm earned net profit during the last five years as follows:
(i) Rs.7,000; (ii) Rs.6,500; (iii) Rs.8,000; (iv) Rs.7,500; (v) Rs.6,000. The capital investment of the firm is Rs.40,000. A fair return on capital in the market is 12%. Find out the value of goodwill of the business if it is based on three years purchase of average super-profits of the past five years.
The solution of Question 11 Chapter 3 of +2- Usha: –
Formula to calculate the Value of Goodwill with Super Profit:
| Goodwill | = |
Super Profit X Number of years’ purchase |
Numbers of years’ of Purchase is given So firstly we have to calculate super profit with the help of following formula:
| Super Profit | = |
Actual Average Profit – Normal Profit |
To calcuate super profit we have to calculate the Actual Average profit and Normal Profit as following:
Calculation of Average Profit: –
| Average Profit | = | Total Profit for past given years |
| Number of years | ||
| = | 7,000 + 6,500 + 8,000 + 7,500 + 6,000 | |
| 5 | ||
| = | 35,000 | |
| 5 | ||
| Average Profit | = | 7,000 |
Calculation of Normal Profit: –
| Normal Profit | = | Capital Employed | X | Normal Rate of Return |
| 100 | ||||
| = | 40,000 | X | 12 | |
| 100 | ||||
| Normal Profit | = | 4,800 |
Calculation of Super Profit:
| Super Profit | = | Actual Average Profit – Normal Profit |
| = | 7,000 – 4,800 | |
| Super Profit | = | 2,200 |
|
Number of years’ purchase |
= | 3 (Given) |
Calculation of Value of Goodwill with Super Profit:
| Goodwill | = | Super Profit X Number of years’ purchase |
| = | 2,200 X 3 | |
| Goodwill | = | 6,600 |
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Chapter-Wise Solution of Usha Publication Accountancy – Part 1 Class 12 – Session 2024-25 as per the PSEB curriculum
Check out Solutions to all questions of the every chapter shown as under. The Solution of Accountancy – Part 1 Class 12 – Session 2024-25 is provided as per the new book published by Usha Publication.
Chapter No. 1 – Accounting Not-for-Profit Organisations (Deleted from the Syllabus)
Chapter No. 2 – Partnership Accounts – I (Introduction)
Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
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Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
Also, Check out our Comprehensive Chapter-wise solution of Advanced Accountancy Part 1 Class 12 by Unimax Publication
- Chapter No. 1 – Accounts of Non-Profit Organisations (Deleted from the Syllabus)
- Chapter No. 2 – Partnership Accounts – I (Basic Concepts)
- Chapter No. 3 – Partnership Accounts – II (Goodwill)
- Chapter No. 4 – Partnership Accounts – III (Change in Profit Sharing Ratio among Existing Partners)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
Check out Part 2 of both books.
In Class 12th the accountancy has 2 books i.e. Part 1 and Part 2. The Books related to the Part 1 are shown above. but If you want to know more about Part 2, you can check it out from the following links. We have provided the links to both books i.e. Accountancy Part 2 by Usha Publication and Advanced Accountancy Part 2 by Unimax Publication.
1. Accountancy – Part 2 Class 12 – Session 2024-25 By Usha Publication
2. Advanced Accountancy Part 2 Class 12 by Unimax Publication
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