Question 36:
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:
31st March, 2026 − ₹ 2,00,000, 31st March, 2025 − ₹
1,80,000, and 31st March, 2024 − ₹ 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.
(e) 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.
Answer:
(i) Goodwill |
=Average Profit×No. of years' purchase=80,000×3=₹ 2,40,000 |
(ii) Goodwill |
=Super Profit×No. of years' purchase=20,000×3=₹ 60,000 |
(iii) Goodwill |
=Super Profit×100÷Normal Rate of Return=20,000×100/10=₹ 2,00,000 |
(iv) Goodwill |
=Capitalised Value-Net Assets=8,00,000-6,00,000=₹ 2,00,000 |
Working Notes:
WN1: Calculation
of Average and Super Profits
Average Profit=Total Profits of past years given/No. of Years
=2,00,000+1,80,000+1,60,000/3
=₹ 1,80,000,
Average Profit (Adjusted) = ₹ 1,80,000 - 1,00,000 (Remuneration to partners)
= ₹ 80,000
Normal Profit=Capital Employed×Normal Rate of Return/100
=6,00,000×10/100=₹ 60,000
Super Profit=Average Profit (Adjusted)-Normal Profit
=80,000-60,000=₹ 20,000
WN2: Calculation of Capital Employed
Capital Employed = Total Assets - Outside Liabilities
= 7,00,000-1,00,000
= ₹ 6,00,000
Question 37:
Rohit and Hardik are partners sharing profits and losses equally. They decided to admít Surya as a partner for 1/3 share. For this purpose, the goodwill of the firm is to be valued. From the following information, calculate the value of goodwill by:
(i) Capitalisation of Average Profit Method.
(ii) Capitalisation of Super Profit Method.
|
(a) Average Capital Employed |
: |
₹ 6,00,000 |
|
(b) Normal Rate of Return |
: |
12% |
|
(c) Profit for last three years: |
: |
|
|
2022-23 |
: |
₹ 90,000 |
|
2023-24 |
: |
₹ 80,000 |
|
2024-25 |
: |
₹ 1,00,000 |
|
(d) Assets (Excluding goodwill) : |
: |
₹ 10,00,000 |
|
(e) Liabilities |
: |
₹ 4,00,000 |
Answer:
(i) Capitalisation of Average Profit Method.
|
Profit for last three years: |
|
|
2022-23 |
₹ 90,000 |
|
2023-24 |
₹ 80,000 |
|
2024-25 |
₹ 1,00,000 |
|
Total Profit = |
₹ 2,70,000 |
Average Profit = 2,70,000 ÷ 3 = 90,000
Capitalised Value of Firm = 90,000 × 100 ÷ 12
Capitalised Value of Firm =7,50,000
Actual Capital Employed = 10,00,000-4,00,000 = 6,00,000
Googlwill = Capitalised Value of Firm - Actual Capital Employed
Googlwill = 7,50,000 – 6,00,000 = 1,50,000
(ii) Capitalisation of Super Profit Method.
Actual Capital Employed = 10,00,000-4,00,000 = 6,00,000
Normal Profit = Capital employed × Rate of Return/100
Normal Profit = 6,00,000 × 12/100 = 72,000
Super Profit = Average Profit - Normal Profit
Super Profit = 90,000 – 72,000 = 18,000
Goodwill = 18,000 × 100 ÷ 12 = ₹ 1,50,000
Ts Grewal Solution 2026-2027
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Class 12 / Volume – I