Question 38 Chapter 3 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 38 Chapter 3 of +2-A

Question 38 Chapter 3 of +2-A

38. A business has earned average profit of 1,00,000 during the last few years. Find out the value of goodwill by capitalisation method, given that the assets of the business are 10,00,000 and its external liabilities are 1,80,000. The normal rate of return is 10%.

 

The solution of Question 38 Chapter 3 of +2-A

:

 

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

 

Actual Capital = Total Assets – Outsider Liabilities
  = 10,00,000 – 1,80,000
  = 8,20,000

 

Goodwill = Capitalized value of Profit – Actual Capital
  = 10,00,000 – 8,20,000
  = 1,80,000

 

 



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)

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

 

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 1 min - Question 38 Chapter 3 of +2-A - T.S. Grewal 12 Class Part - A Vol. 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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