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

Question 16 Chapter 3 of +2-Part-1

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

 

Value of business	=	Average Profit	X	100
				Normal Rate of Return
	=	1,00,000	X	100
				10
	=	10,00,000

 

Goodwill	=	Capitalised value of the business – Average Capital Employed
	=	10,00,000- 1,80,000
	=	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

• Chapter No. 1 – Accounting Not for Profit Organisations
• Chapter No. 2 – Partnership Accounts – I
• Chapter No. 3 – Partnership Accounts – II (Introduction)
• Chapter No. 4 – Partnership Accounts – III (Goodwill: Nature and Valuation)
• Chapter No. 5 – Partnership Accounts – IV (Reconstitution of Partnership)
• Chapter No. 6 – Partnership Accounts – V (Admission of A Partner)
• Chapter No. 7 – Partnership Accounts – VI (Retirement and Death of A Partner)
• 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 (Balance Sheet Only)
• Chapter No. 2 – Techniques of Financial Statement Analysis
• Chapter No. 3 – Ratio Analysis 
• Chapter No. 4 – Cash Flow Statement

 

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