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Question 26 Chapter 3 of USHA Publication 12 Class Part – 1

Question 26 Chapter 3 of +2 Part-1 - USHA Publication 12 Class Part - 1
Question 26 Chapter 3 of +2 Part-1 - USHA Publication 12 Class Part - 1

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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
Normal Profit=Capital EmployedXNormal Rate of Return
 100
     
 =8,20,000X10
 100
     
 =82,000  
Super Profit=Average- Normal Profit
 =1,00,000 -82,000
 =18,000
Goodwill=Super ProfitX100
 Normal Rate of Return
     
 =18,000X100
 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

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

 

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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