Question : A firm earned average profit of Rs.45.000. Rate of return on capital employed is 12% p.a. Total capital employed is Rs.4,00,000. Goodwill on the basis of two years purchase of super profit is:
Option 1: Rs.6,000
Option 2: Rs.12,000
Option 3: Rs.18,000
Option 4: None of these

Question

Question : A firm earned average profit of Rs.45.000. Rate of return on capital employed is 12% p.a. Total capital employed is Rs.4,00,000. Goodwill on the basis of two years purchase of super profit is:

Option 1: Rs.6,000

Option 2: Rs.12,000

Option 3: Rs.18,000

Option 4: None of these

Team Careers360 · Accepted Answer

Correct Answer: None of these

Solution : Normal Profit = Capital employed X Normal rate of return = Rs.4,00,000 X 12% = Rs.48,000.
Super Profit = Average Profit - Normal Profit = Rs.45,000 - Rs.48,000 = (Rs.3,000)
Goodwill = Super Profit X Number of years purchase = (Rs.3,000) X 2 = (Rs.6,000).
Hence, the correct option is 4.

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Question : A firm earned average profit of Rs.45.000. Rate of return on capital employed is 12% p.a. Total capital employed is Rs.4,00,000. Goodwill on the basis of two years purchase of super profit is:Option 1: Rs.6,000Option 2: Rs.12,000Option 3: Rs.18,000Option 4: None of these

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Question : A firm earned average profit of Rs.45.000. Rate of return on capital employed is 12% p.a. Total capital employed is Rs.4,00,000. Goodwill on the basis of two years purchase of super profit is:
Option 1: Rs.6,000
Option 2: Rs.12,000
Option 3: Rs.18,000
Option 4: None of these