Sarthaks Test
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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.

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= 6,36,000 x 2.5

= Rs. 15,90,000

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