Question 37 Chapter 3 of +2-A
Table of Contents
37. From the following information, calculate the value of goodwill of the firm by applying Capitalisation Method: Total Capital of the firm 16,00,000.
The normal rate of return 10%. Profit for the year 2,00,000
The solution of Question 37 Chapter 3 of +2-A:
| Capitalized Value of Profit | = | Profit X 100 |
| Normal Rate of Return |
| = | 2,00,000 X 100 | |
| 10 | ||
| = | 20,00,000 |
| Actual Capital | = | 16,00,000 |
| Goodwill | = | Capitalized value of Profit – Actual Capital |
| = | 20,00,000 – 1,60,000 | |
| = | 4,00,000 |
T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)
- Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
- Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
- Chapter No. 3 – Goodwill: Nature and Valuation
- Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
- Chapter No. 5 – Admission of a Partner
- Chapter No. 6 – Retirement/Death of a Partner
- Chapter No. 7 – Dissolution of a Partnership Firm
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
- Chapter No. 4 – Accounting Ratios
- Chapter No. 5 – Cash Flow Statement
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