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CBSE Class 12-commerce Answered

From the following information, calculate value of goodwill of the firm:     (i) At three years' purchase of Average Profit.        (ii) At three years' purchase of Super Profit.     (iii) On the basis of Capitalisation of Super Profit.  (iv) On the basis of Capitalisation of Average Profit. Information:  (a)Average Capital Employed is ₹ 6,00,000.  (b) Net Profit/Loss of the firm for the last three years ended are: 31stMarch, 2017- ₹ 2,00,000, 31stMarch,        2016 - ₹ 1,80,000, and 31stMarch, 2015 - ₹ 1,60,000. (c) Normal Rate of Return in similar business is 10%.  (d) Remuneration of ₹ 1,00,000 to partners is to be taken as charge against profit. Assets of the firm (excluding goodwill, fictitious assets and non-trade investments) is ₹ 7,00,000 whereas Partners’ Capital is ₹ 6,00,000 and Outside Liabilities ₹ 1,00,000. 
Asked by DINU.SAIN | 17 Aug, 2019, 09:59: AM
answered-by-expert Expert Answer
The question is based on Valuation of Goodwill and all the similar questions from this chapter are already available on our website.
Kindly refer the detailed solutions with complete working notes provided for all the text book questions of T.S.Grewal on our website which will surely help you solve similar problems accurately.
Answered by Surabhi Gawade | 18 Aug, 2019, 11:24: PM

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