Question 11:
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
12:
Sakshi and Megha were partners sharing profits and
losses in the ratio of 3 :1. Capital employed as on 31st March, 2024 was
₹ 14,00,000. Profit earned on an average is ₹1,80,000. Calculate
goodwill of the firm on the basis of 5 years' purchase of Super Profits, if the
normal rate of return is 10%.
Answer:
Normal
Profit = Capital employed × Rate of Return/100
Normal
Profit = 14,00,000× 10/100 = 1,40,000
Super
Profit = Normal Profit – Average Profit
Super
Profit = 1,80,000- 1,40,000 = 40,000
Goodwill
=
40,000 × 5 = ₹ 2,00,000
Question13:
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 14:
Average net profit expected in future by XYZ firm is ₹ 36,000 per year. Average capital employed in the business by the firm is ₹ 2,00,000. The normal rate of return from capital invested in this class of business is 10%. Remuneration of the partners is estimated to be ₹ 6,000 p.a. Calculate the value of goodwill on the basis of two years' purchase of super profit.
Answer:
Goodwill= Super profit × no. of purchases
years’
Normal profit = Capital employed×Rate of
return/100
Normal profit = 2,00,000×10/100=20,000
Actual exceeded profit =30,000-6000=30,000
Super profit = Actual profit - Normal profit
Super profit = 30,000 – 20,000=10,000
Number of years’ purchase = 2
Goodwill =10,000×2=20,000
Question 15:
A partnership firm earned net profits during the last three years ended 31st March, as follows:
2023 − ₹ 17,000; 2024
− ₹ 20,000; 2025 − ₹ 23,000.
The capital investment in the firm throughout the above-mentioned period has been₹
80,000. Having regard to the risk involved, 15% is considered to be a fair
return on the capital. Calculate value of goodwill on the basis of two years'
purchase of average super profit earned during the above-mentioned three years.
Answer:
Goodwill=
Super profit × no. of purchases years’
Average profit = total profit of past given
years/number of years
Average Actual profit
=17,000+20,000+20,000/3=20000
Normal
profit = Capital employed×Rate of return/100
Normal
profit = 20,000×15/100=12,000
Super profit = Actual profit - Normal profit
Super profit = 20,000 – 12,000=8,000
Number of years’ purchase = 2
Goodwill=
8,000 × 2=16,000
Ts Grewal Solution 2025-2026
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Class 12 / Volume – I