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
Answer (1)
27th Jan, 2024
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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