Question 31:
On 1st April, 2018, a firm had assets of
`1,00,000 excluding stock of `
20,000. The current liabilities were `10,000
and the balance constituted Partners' Capital Accounts. If the normal rate of
return is 8%, the Goodwill of the firm is valued of `60,000 at four
years' purchase of super profit, find the actual profits of the firm. (CBSE Sample paper, 2018)
Answer:
Total Assets of the firm=(Sundry Assets + Stock)=
`(1,00,000+20,000)=
`1,20,000
Current Liabilities of the firm=
`10,000
Capital Employed=(Total Assets - Current Liabilities)=
`(1,20,000 - 10,000)=
`1,10,000
Normal Profits=Capital Employed
× Normal Rate of Return/100= `1,10,000×8/100=
`8,800
Goodwill = Super Profits × No. of years of purchase
60,000=
Super Profits × 4
Super Profits=
`60,000/4=
`15,000
Super Profits= Average Actual Profits - Normal Profits
15,000=Average Actual Profits - 8,800
Average Actual Profits=
`(15,000+8,800)=
`23,800
Question 32: Average profit of a firm during the last few years is `1,50,000. In similar business, the normal rate of return is 10% of the capital employed. Calculate the value of goodwill by capitalisation of super profit method if super profits of the firm are `50,000. (CBSE 2020)
Answer:
Super Profit = 50,000
Goodwill = Super Profit ×100/Rate of Return
Goodwill = 50,000 ×100/10
Goodwill = 5,00,000
Question 33: Raja Brothers earn an average profit of `30,000 with a capital of `2,00,000. The normal rate of return in the business is 10%. Using capitalisation of super profit method, workout the value of the goodwill of the firm. (NCERT)
Answer:
Calculation of
goodwill under capitalization of super profit method
Capital value = super profit ×100/rate of return
Normal profit = capital employed × rate of
return/100
Normal profit = 200,000×10/100=20,000
Super profit = 30,000-20,000
Super profit = 10,000
Goodwill=
10,000×100/10=1,00,000
Question 34:
Rajan and Rajani are partners in a firm. Their capitals were Rajan ` 3,00,000; Rajani ` 2,00,000. During the year 31st March, 2023, the firm earned a profit of ` 1,50,000. Calculate the value of goodwill of the firm by capitalisation of super profit assuming that the normal rate of return is 20%.
Answer:
Goodwill=Super Profits×100/Nominal Rate of Return
Super Profits=Average Profit-Normal Profit
Average Profit=
`1,50,000
(Given)Normal Profit=Capital Employed×Normal Rate of Return
Normal Profit=(3,00,000+2,00,000)×20%= `1,00,000
Super Profit=1,50,000-1,00,000= `50,000
Goodwill=50,000×100/20=
` 2,50,000
Question 35:
Average profit of GS & Co. is `
50,000 per year. Average capital employed in the business is `
3,00,000. If the normal rate of return on capital employed is 10%, calculate
goodwill of the firm by:
(i) Super Profit Method at three years' purchase; and
(ii) Capitalisation of Super Profit Method.
Answer:
|
(i) Goodwill |
=Super Profit×No. of Years' Purchase
=20,000×3= ` 60,000
|
|
(ii) Goodwill |
=Super Profit×100/Normal Rate of Return
=20,000×100/10
= ` 2,00,000
|
Working Notes:
WN1: Calculation of Super Profits
Average Profit=Total Profits for past given years/No. of Years
= ` 50,000
Normal Profit=Capital Employed×Normal Rate of Return/100
=3,00,000×10/100= ` 30,000
Super Profit=Average Profit-Normal Profit
=50,000-30,000=
` 20,000
Ts Grewal Solution 2023-2024
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Class 12 / Volume – I