Question : Average profit is Rs.5,00,000. Capital employed is Rs.40,00,000. Normal rate of return is 8%. The value of goodwill on the basis of capitalisation of super profit is:
Option 1: Rs.22,50,000
Option 2: Rs.25,00,000
Option 3: Rs.32,50,000
Option 4: Rs.15,50,000
Correct Answer: Rs.22,50,000
Solution : Normal Profit = Capital employed X Normal rate of return = Rs.40,00,000 X 8% = Rs.3,20,000 Average Profit = Rs.5,00,000 Super Profit = Average Profit - Normal Profit = Rs.5,00,000 - Rs.3,20,000 = Rs.1,80,000 Goodwill = Super Profit X 100/Normal rate of return = Rs.1,80,000 X 100/8 = Rs.22.50,000. Hence, the correct option is 1.
Question : The average capital employed in a business is Rs.5,00,000 and the average net profit earned is Rs.65,000. If normal rate of return on capital employed is 8% and remuneration of Rs.20,000 is expected, then the super profit of the concern is:
Question : If average capital employed in a firm is Rs.5,00,000, actual profit is Rs.70,000 and normal rate of return is 10%, then super profit is:
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:
Question : Calculate the value of goodwill at 3 years' purchase when: Capital employed Rs.2,50,000; Average profit Rs.30,000 and normal rate of return is 10%.
Question :
The Formula for Capitalisation of Super Profit Method is:
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