Question 17 Chapter 3 of +2 Part-1 – USHA Publication 12 Class Part – 1

Question 17 Chapter 3 of +2- Part-

Question 17 Chapter 3 of +2-Part-1

17. (Capitalisation Method) The average net profits expected in future by Ram Gopal and Sons are Rs.25,000 per year. The average capital employed in the business by the firm is Rs.1,80,000. The normal rate of return on the capital employed in similar business is 10%. Calculate goodwill of the firm by the capitalization of average method.

 

The solution of Question 17 Chapter 3 of +2 Part-1: – 

 

 

Capitalised value of the business = Average Profit X 100
  Normal Rate of Return
         
  = 25,000 X 100
  10
         
  = 2,50,000    

 

Goodwill = Capitalised value of the business – Average Capital Employed
  = 2,50,000,- 1,80,000
  = 70,000

 

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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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2 Book 1 min - Question 17 Chapter 3 of +2 Part-1 - USHA Publication  12 Class Part - 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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