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Question 16 Chapter 3 of +2 Part-1 – USHA Publication 12 Class Part – 1

Question 16 Chapter 3 of +2- Part-
Q-16 - CH-3 - Usha +2 Book 2018 - Solution

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Question 16 Chapter 3 of +2-Part-1

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16. (Capitalisation Method) A firm earns Rs.1,00,000 as its annual profits, the rate of normal profits being 10%. The assets of the firm amount to Rs.5,00,000 and the liabilities Rs.2,00,000. Find out the value of goodwill by capitalization method.

 

The solution of Question 16 Chapter 3 of +2 Part-1: – 

 

Capital Employed=Total Assets – Liabilities
 =5,0,0000 – 2,00,000
 =3,00,000

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Value of business=Average ProfitX100
 Normal Rate of Return
     
 =1,00,000X100
 10
     
 =10,00,000  

 

Goodwill=Capitalised value of the business – Average Capital Employed
 =10,00,000- 3,00,000
 =7,00,000

 

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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

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

+2 Book 1-min
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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