Question 12 Chapter 3 of +2-Part-1
Table of Contents
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
- Chapter No. 1 – Accounting Not for Profit Organisations
- 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)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
- Chapter No. 8 – Company Accounts (Share Capital)
- Chapter No. 9 – Company Accounts (Issue of Debentures)
- Chapter No. 10 – Company Accounts (Redemption of Debentures)
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis- Comparative and Common Size
- Chapter No. 4 – Ratio Analysis
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
