Question 12 Chapter 3 of +2 Part-1 – USHA Publication 12 Class Part – 1

Question 12 Chapter 3 of +2- Part-

Question 12 Chapter 3 of +2-Part-1

12. (Super Profit Method) A firm has total assets of Rs.2,50,000 including cash of Rs.30,000.The creditors are Rs.40,000. Normal rate of return is 10% on capital employed. Goodwill of the firm is valued at Rs.1,20,000 at four years purchase of super profits. Find the average profits.

 

The solution of Question 12 Chapter 3 of +2 Part-1: – 

 

Capital Employed = Total Assets – Liabilities
  = 2,50,000 – 40,000
  = 2,10,000
Number of years’ purchase = 3
Goodwill = Super Profit X Number of years’ purchase
Goodwill = 2,200 X 3
Goodwill = 6,600

 

Average Profit = Capital Employed X Normal Rate of Return
  100
         
  = 2,10,000 X 10
  100
         
  = 21,000    
Goodwill of Firm = 1,20,000(Given)    

 

Super Profit = Firm Goodwill
  Number of years
     
  = 1,20,000
  4
     
  = 30,000

 

 

Average Profit = Normal Profit + Super Profit
  = 21,000 + 30,000
  = 51,000

 

Thanks, Please Like and share with your friends  

Comment if you have any questions.

Also, Check out the solved question of previous Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

 

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 1 min - Question 12 Chapter 3 of +2 Part-1 - USHA Publication  12 Class Part - 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

Leave a Reply