Question 20 Chapter 3 of Class 12 Part – 1 Usha Publication

Question 20 Chapter 3 of Class 12 Part – 1 Usha Publication

20. (Super Profit/Capitalisation method) A firm earns a profit of Rs.5,000 per year. The average capital employed in the business by the firm is Rs.25,000. The normal rate of return on the capital employed in similar business is 10%.
You are required to calculate goodwill of the firm by
a. Super profit method on the basis of three years purchase.
b. Capitalisation method (Both super profit & average profit).

The solution of Question 20 Chapter 3 of Class 12 Part – 1 Usha Publication: –

Actual Profits p.a	=	Rs.5,000
Capital Employed	=	Rs. 25,000
Rate of return	=	10%

Normal Profit	=	Capital Employed	X	Normal Rate of Return
				100
	=	25,000	X	10
				100
	=	2,500

i) Super Normal Profit Method

Super Profit	=	Actual Profit – Normal Profit
	=	5,000 – 2,500
	=	2,500

Number of years’ purchase	=	3
Goodwill	=	Super Profit X Number of years’ purchase
	=	2,500 X 3
	=	7,500

ii) Capitalisation Method:

a) Capitalisation of Super Profits Method:

Goodwill	=	Super Profit	X	100
				Normal Rate of Return
	=	2,500	X	100
				10
	=	25,000

b) Capitalisation of Average Profits Method:

Capitalisation of Business	=	Average Profit	X	100
				Normal Rate of Return
	=	5,000	X	100
				10
	=	50,000

Goodwill	=	Capitalised value of the business – Average Capital Employed
	=	50,000 – 25,000
	=	25,000

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End of Solution

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Chapter-Wise Solution of Usha Publication Accountancy – Part 1 Class 12 – Session 2024-25 as per the PSEB curriculum

Check out Solutions to all questions of the every chapter shown as under. The Solution of Accountancy – Part 1 Class 12 – Session 2024-25 is provided as per the new book published by Usha Publication.

Chapter No. 1 – Accounting Not-for-Profit Organisations (Deleted from the Syllabus)

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)

Also, Check out our Comprehensive Chapter-wise solution of Advanced Accountancy Part 1 Class 12 by Unimax Publication

• Chapter No. 1 – Accounts of Non-Profit Organisations (Deleted from the Syllabus)
• Chapter No. 2 – Partnership Accounts – I (Basic Concepts)
• Chapter No. 3 – Partnership Accounts – II (Goodwill)
• Chapter No. 4 – Partnership Accounts – III (Change in Profit Sharing Ratio among Existing Partners)
• 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)

Check out Part 2 of both books.

In Class 12th the accountancy has 2 books i.e. Part 1 and Part 2. The Books related to the Part 1 are shown above. but If you want to know more about Part 2, you can check it out from the following links. We have provided the links to both books i.e. Accountancy Part 2 by Usha Publication and Advanced Accountancy Part 2 by Unimax Publication.

1. Accountancy – Part 2 Class 12 – Session 2024-25 By Usha Publication

Accountancy – Part 2 Class 12 – Session 2024-25 – Solution for free

2. Advanced Accountancy Part 2 Class 12 by Unimax Publication

Advanced Accountancy II Part 2 Class 12 – Solution for free