Question 11: The capital of the firm of Anuj and Benu is `10,00,000 and the market rate of interest is 15%. Annual salary to the partners is `60,000 each. The profit for the last three years were `3,00,000, `3,60,000 and `4,20,000. Goodwill of the firm is to be valued on the basis of two years' purchase of last three years average super profit. Calculate the goodwill of the firm. (CBSE 2022)
Answer:
Average profit
= Total profit / number of years
=3,00,000+360,000+4,20,000/3
=3,60,000
Goodwill=
Super profit × no. of purchases years’
Super profit =
average profit- partners salary- normal profit × no. of purchases years’
=360,000-(60,000×2)-(10,00,000×15/100)×2
purchase
=90,000×2
=1,80,000
Question 12:
Atul and Bipul had a firm in which they had invested ` 50,000. On an average, the profits were ` 16,000. The normal rate of return in the industry is 15%. Goodwill is to be valued at four years' purchase of profits in excess of profits @ 15% on the money invested. Calculate the value goodwill.
Answer:
Goodwill=
Super profit × no. of purchases years’
Normal
profit = Capital employed×Rate of return/100
Normal
profit = 50,000×15/100=7,500
Actual
profit =16,000
Super
profit = Actual profit - Normal profit
Super
profit = 16,000 – 7,500=8,500
Number of years’ purchase = 4
Goodwill =8,500×4=34,000
Question
13:
The total capital of the firm of Sakshi, Mehak and Megha is ` 1,00,000 and the market rate of interest is 15%. The net profits for the last 3 years were ` 30,000; ` 36,000 and ` 42,000. Goodwill is to be valued at 2 years' purchase of the last 3 years' super profits. Calculate the goodwill of the firm.
Answer:
Goodwill=Super Profit×Number of Years' Purchase
Super Profits = Average Profit - Normal Profit
Average Profits = Total ProfitsNumber of Years=30,000+36,000+42,000÷3= ` 36,000
Normal Profits = Capital Employed × Normal Rate of Return=1,00,000×15÷100=15,000
Super Profits=36,000-15,000=21,000
Goodwill=21,000×2= ` 42,000
Question14:
A and B were partners in a firm sharing profits equally. Their capitals were:
A-1,20,000 and B- 80,000. The annual rate of interest is 20%. Profits of the
firm for the last three years were 34,000; 38,000 and 30,000. They admitted C a
new partner. On C's admission the goodwill of the firm was valued at 2 years'
purchase of the super profits.
Calculate the value of
goodwill of the firm on C's admission. (CBSE 2023)
Answer:
Since, Average Profit = 34,000
+38,000 + 30,000 =34,000
Normal Profit
= 20% of Capital Employed = 20/100 x 2,00,000 = 40,000
Average Profit is lower than
normal Profit. In other words, Super Profit is negative.
The firm does not have goodwill.
Question 15:
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 ` 22,00,000 and ` 5,60,000 respectively. Calculate the value of goodwill of the firm by super profit method if it is valued at 2½ years' purchase of super profits.
Answer:
Average profit =80,000
Normal profit = Capital employed×Rate of
return/100
Normal profit = 16,40,000×10/100=1,64,000
Capital employed = total assests- Outside liabilities
Capital employed = 22,00,000- 5,60,000=16,40,000
Super profit = Actual profit - Normal profit
Super profit =8,00,000-1,64,000=6,36,000
Goodwill= Super profit × no. of purchases
years’
Number of years’ purchase = 2.5
Goodwill= 6,36,000×2.5 =15,90,000
Ts Grewal Solution 2024-2025
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Class 12 / Volume – I