Sarthaks Test
0 votes
in Accounts by (64.1k points)
edited by

A business earned an average profit of 8,00,000 during the last few years. The normal rate of profit in the similar type of business is 10%. The total value of assets and liabilities of the business were Rs.22,00,000 and Rs.5,60,000 respectively. Calculate the value of goodwill of the firm by super profit method if it is valued at 21/2 years’ purchase of super profits.

1 Answer

0 votes
by (106k points)
selected by
Best answer

= 6,36,000 x 2.5

= Rs. 15,90,000

Related questions

Welcome to Sarthaks eConnect: A unique platform where students can interact with teachers/experts/students to get solutions to their queries. Students (upto class 10+2) preparing for All Government Exams, CBSE Board Exam, ICSE Board Exam, State Board Exam, JEE (Mains+Advance) and NEET can ask questions from any subject and get quick answers by subject teachers/ experts/mentors/students.