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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 


Team Careers360 18th Jan, 2024
Answer (1)
Team Careers360 19th Jan, 2024

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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