Question 9 Chapter 3 of Class 12 Part - 1 VK Publication

Question 9 Chapter 3 of Class 12 Part – 1

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The solution of Question 9 Chapter 3 of Class 12 Part – 1: –

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

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

9. A firm earned net profits during the last five years ended on 31st March as follows: 2014
Rs. 94,000: 2015 Rs. 32,000; 2016 Rs. 22,000;2017 Rs. 38,000 and 2018 Rs. 44,000.
The capital invested in the firm is 2,00,000. The fair return on capital in such type of business is 10%. Find out the value oft goodwill, based on the four years’ purchase of super profit of the last five years.

The solution of Question 9 Chapter 3 of Class 12 Part – 1: –

Average Profit	=	Total Profit
Average Profit	=	Number of Years

	=	24,000++32,000+22,000+38,000+44,000
	=	5

	=	1,60,000
	=	5

	=	32,000

Normal Profit = 2,00,000 ×10/100 = Rs. 20,000
Super Profit = Average Profit – Normal Profit
= 32,000-20,000 = Rs. 12,000
Goodwill = Super Profit x Normal Rate of Return
= 12,000 x 4= Rs. 48,000

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Also, Check out the solved question of previous Chapters: –