Total assets of a firm including fictitious assets of ₹ 5,000 are ₹ 85,000. The net liabilities of the firm are ₹ 30,000. The normal rate of return is 10% and the average profits of the firm are ₹ 8,000. Calculate the goodwill as per capitalisation of super profits.

Question

KollegeApply · Accepted Answer

₹ 30,000 Explanation: Actual Assets = 85,000 − 5,000 = ₹ 80,000 Capital Employed = Actual Assets − Net Liabilities = 80,000 − 30,000 = ₹ 50,000 Normal Profit = Capital Employed xx "NRR"/100 = 50,000 xx $\frac{10}{100}$ = ₹ 5,000 Super Profit = Average Profit − Normal Profit = 8,000 − 5,000 = ₹ 3,000 Goodwill = "Super Profit" xx 100/"NRR" = 3,000 xx $\frac{100}{10}$ = ₹ 30,000

AChoose Your Answer