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Question 26 Chapter 3 of USHA Publication 12 Class Part – 1
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26. (Capitalisation of S.P./S.P. Method) A business has earned average profits of ₹ 1,00,000 during the last few years and the normal rate of return in similar business is 10%. Find out the value of goodwill by
(i)Capitalisation of super profit method
(ii) Super profit method if the goodwill is valued at 3 year’s purchase of super profit. The asset of the business were ₹ 10,00,000 and its external liabilities ₹ 1,80,000.
The solution of Question 26 Chapter 3 of USHA Publication 12 Class Part – 1: –
Capital Employed | = | Total Assets – Liabilities |
= | 10,00,000 – 1,80,000 | |
= | 8,20,000 |
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Normal Profit | = | Capital Employed | X | Normal Rate of Return |
100 | ||||
= | 8,20,000 | X | 10 | |
100 | ||||
= | 82,000 |
Super Profit | = | Average- Normal Profit |
= | 1,00,000 -82,000 | |
= | 18,000 |
Goodwill | = | Super Profit | X | 100 |
Normal Rate of Return | ||||
= | 18,000 | X | 100 | |
10 | ||||
= | 1,80,000 |
Goodwill | = | Super profit x No. of year purchase |
= | 18,000 x 3 | |
= | 54,000 |
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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 (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

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