Question : Bharat and Bhushan are partners in a retail business. Balances in their Capital and Current Accounts as on 31st March, 2020 were:
| Capital Account | Current Account |
| Bharat Rs. 2,00,000 |
Rs. 50,000 |
| Bhushan Rs. 2,40,000 |
Rs. 10,000 (Dr.) |
The firm earned an average profit of Rs. 90,000. If the normal rate of return is 10%, value of goodwill.
Option 1: Rs 4,20,000
Option 2: Rs 4,10,000
Option 3: Rs 13,80,000
Option 4: None of these
Correct Answer: Rs 4,20,000
Solution : Answer = 4,20,000
Capitalised Value of the Business = = Rs. 90,000 x = Rs. 9,00,000
Capital employed R= 2,00,000+2,40,000+50,000-10,000=4,80,000
Goodwill =Rs 9,00,000-4,80,000= Rs 4,20,000.
Hence, the correct option is 1.
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