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assuming four years purchase of super profit find value of goodwill net profit 514000 includes interest 8 % non trading investments costing rs 198200/- face value is rs 200000 express amounting is rs 7000 pa are likely to be discounted in future provision for tax 30% ,normal rate of return 10% ,average capital employed rs 1898200
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assuming four years purchase of super profit find value of goodwill n...
To calculate the value of goodwill, we need to determine the super profit first. Super profit is the excess profit earned by a company over and above the normal profit.

Step 1: Calculate the normal profit:
Normal profit = Average capital employed * Normal rate of return
Normal profit = Rs 1,898,200 * 10% = Rs 189,820

Step 2: Calculate the super profit:
Super profit = Net profit - Normal profit
Super profit = Rs 514,000 - Rs 189,820 = Rs 324,180

Step 3: Determine the capitalization rate:
Capitalization rate = 100 / Normal rate of return
Capitalization rate = 100 / 10% = 10

Step 4: Calculate the value of goodwill:
Goodwill = Super profit * Capitalization rate
Goodwill = Rs 324,180 * 10 = Rs 3,241,800

Therefore, the value of goodwill is Rs 3,241,800.
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assuming four years purchase of super profit find value of goodwill net profit 514000 includes interest 8 % non trading investments costing rs 198200/- face value is rs 200000 express amounting is rs 7000 pa are likely to be discounted in future provision for tax 30% ,normal rate of return 10% ,average capital employed rs 1898200 Related: Introduction to Goodwill - Valuation of Goodwill & Shares, Advanced Corporate Accounting?
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assuming four years purchase of super profit find value of goodwill net profit 514000 includes interest 8 % non trading investments costing rs 198200/- face value is rs 200000 express amounting is rs 7000 pa are likely to be discounted in future provision for tax 30% ,normal rate of return 10% ,average capital employed rs 1898200 Related: Introduction to Goodwill - Valuation of Goodwill & Shares, Advanced Corporate Accounting? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about assuming four years purchase of super profit find value of goodwill net profit 514000 includes interest 8 % non trading investments costing rs 198200/- face value is rs 200000 express amounting is rs 7000 pa are likely to be discounted in future provision for tax 30% ,normal rate of return 10% ,average capital employed rs 1898200 Related: Introduction to Goodwill - Valuation of Goodwill & Shares, Advanced Corporate Accounting? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for assuming four years purchase of super profit find value of goodwill net profit 514000 includes interest 8 % non trading investments costing rs 198200/- face value is rs 200000 express amounting is rs 7000 pa are likely to be discounted in future provision for tax 30% ,normal rate of return 10% ,average capital employed rs 1898200 Related: Introduction to Goodwill - Valuation of Goodwill & Shares, Advanced Corporate Accounting?.
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