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The capital of Nikita and Munna is rs.100000 and the market value of interest is 15%. Annual salary to partners is rs.6000 each. The profit for the last four years were rs.25000,rs.30000,rs.36000 and rs.42000. Goodwill is to be valued at 2 years purchase of the last 3 years average super profit. Calculate the goodwill of the firm.?
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The capital of Nikita and Munna is rs.100000 and the market value of i...
Calculation of Goodwill of the Firm
Given Data:
- Capital of Nikita and Munna = Rs. 100000
- Market value of interest = 15%
- Annual salary to partners = Rs. 6000 each
- Profit for the last four years = Rs. 25000, Rs. 30000, Rs. 36000, and Rs. 42000
Calculation of Average Profit:
- Total profit for the last three years = Rs. 30000 + Rs. 36000 + Rs. 42000 = Rs. 108000
- Average profit for the last three years = Rs. 108000 / 3 = Rs. 36000
Calculation of Super Profit:
- Normal Profit = Capital * Market value of interest = Rs. 100000 * 15% = Rs. 15000
- Super Profit = Average profit - Normal Profit = Rs. 36000 - Rs. 15000 = Rs. 21000
Calculation of Goodwill:
- Goodwill = 2 years purchase of the last 3 years average super profit
- Goodwill = 2 * Rs. 21000 = Rs. 42000
Final Calculation:
- Total value of the firm = Capital + Goodwill = Rs. 100000 + Rs. 42000 = Rs. 142000
Explanation:
- Goodwill is the value of the reputation and customer base of a business that is not reflected in its assets or earnings. It is calculated by multiplying the average super profit of the last few years by a certain factor, usually 2 to 5 years.
- In this question, the capital of the firm is given as Rs. 100000, and the market value of interest is 15%. This means that the normal profit of the firm is Rs. 15000 (15% of Rs. 100000).
- The annual salary to partners is given as Rs. 6000 each, which is not relevant to the calculation of goodwill.
- The profit for the last four years is given as Rs. 25000, Rs. 30000, Rs. 36000, and Rs. 42000. To calculate the average profit of the last three years, we add up the profits of the last three years and divide by 3. This gives us an average profit of Rs. 36000.
- To calculate the super profit, we subtract the normal profit (Rs. 15000) from the average profit (Rs. 36000). This gives us a super profit of Rs. 21000.
- Finally, we calculate the goodwill by multiplying the average super profit by 2 years. This gives us a goodwill of Rs. 42000.
- The total value of the firm is then calculated by adding the capital and goodwill, which gives us Rs. 142000.
Given Data:
- Capital of Nikita and Munna = Rs. 100000
- Market value of interest = 15%
- Annual salary to partners = Rs. 6000 each
- Profit for the last four years = Rs. 25000, Rs. 30000, Rs. 36000, and Rs. 42000
Calculation of Average Profit:
- Total profit for the last three years = Rs. 30000 + Rs. 36000 + Rs. 42000 = Rs. 108000
- Average profit for the last three years = Rs. 108000 / 3 = Rs. 36000
Calculation of Super Profit:
- Normal Profit = Capital * Market value of interest = Rs. 100000 * 15% = Rs. 15000
- Super Profit = Average profit - Normal Profit = Rs. 36000 - Rs. 15000 = Rs. 21000
Calculation of Goodwill:
- Goodwill = 2 years purchase of the last 3 years average super profit
- Goodwill = 2 * Rs. 21000 = Rs. 42000
Final Calculation:
- Total value of the firm = Capital + Goodwill = Rs. 100000 + Rs. 42000 = Rs. 142000
Explanation:
- Goodwill is the value of the reputation and customer base of a business that is not reflected in its assets or earnings. It is calculated by multiplying the average super profit of the last few years by a certain factor, usually 2 to 5 years.
- In this question, the capital of the firm is given as Rs. 100000, and the market value of interest is 15%. This means that the normal profit of the firm is Rs. 15000 (15% of Rs. 100000).
- The annual salary to partners is given as Rs. 6000 each, which is not relevant to the calculation of goodwill.
- The profit for the last four years is given as Rs. 25000, Rs. 30000, Rs. 36000, and Rs. 42000. To calculate the average profit of the last three years, we add up the profits of the last three years and divide by 3. This gives us an average profit of Rs. 36000.
- To calculate the super profit, we subtract the normal profit (Rs. 15000) from the average profit (Rs. 36000). This gives us a super profit of Rs. 21000.
- Finally, we calculate the goodwill by multiplying the average super profit by 2 years. This gives us a goodwill of Rs. 42000.
- The total value of the firm is then calculated by adding the capital and goodwill, which gives us Rs. 142000.
Community Answer
The capital of Nikita and Munna is rs.100000 and the market value of i...
Answer is valu of 18,000
Solution :-
Interest on capital = 100,000 × 15 = 15,000
Add, salary = 12,000
= 27,000
Super profit = Average profit - normal profit
Avg profit = 1/3 of 108,000 = 36,000
Normal profit = 27,000
Therefore , Super profit = 36,000 - 27,000 = 9000
Goodwill = 9,000 × 2 = 18,000
Thanks !
Solution :-
Interest on capital = 100,000 × 15 = 15,000
Add, salary = 12,000
= 27,000
Super profit = Average profit - normal profit
Avg profit = 1/3 of 108,000 = 36,000
Normal profit = 27,000
Therefore , Super profit = 36,000 - 27,000 = 9000
Goodwill = 9,000 × 2 = 18,000
Thanks !
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The capital of Nikita and Munna is rs.100000 and the market value of interest is 15%. Annual salary to partners is rs.6000 each. The profit for the last four years were rs.25000,rs.30000,rs.36000 and rs.42000. Goodwill is to be valued at 2 years purchase of the last 3 years average super profit. Calculate the goodwill of the firm.?
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The capital of Nikita and Munna is rs.100000 and the market value of interest is 15%. Annual salary to partners is rs.6000 each. The profit for the last four years were rs.25000,rs.30000,rs.36000 and rs.42000. Goodwill is to be valued at 2 years purchase of the last 3 years average super profit. Calculate the goodwill of the firm.? 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 The capital of Nikita and Munna is rs.100000 and the market value of interest is 15%. Annual salary to partners is rs.6000 each. The profit for the last four years were rs.25000,rs.30000,rs.36000 and rs.42000. Goodwill is to be valued at 2 years purchase of the last 3 years average super profit. Calculate the goodwill of the firm.? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The capital of Nikita and Munna is rs.100000 and the market value of interest is 15%. Annual salary to partners is rs.6000 each. The profit for the last four years were rs.25000,rs.30000,rs.36000 and rs.42000. Goodwill is to be valued at 2 years purchase of the last 3 years average super profit. Calculate the goodwill of the firm.?.
The capital of Nikita and Munna is rs.100000 and the market value of interest is 15%. Annual salary to partners is rs.6000 each. The profit for the last four years were rs.25000,rs.30000,rs.36000 and rs.42000. Goodwill is to be valued at 2 years purchase of the last 3 years average super profit. Calculate the goodwill of the firm.? 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 The capital of Nikita and Munna is rs.100000 and the market value of interest is 15%. Annual salary to partners is rs.6000 each. The profit for the last four years were rs.25000,rs.30000,rs.36000 and rs.42000. Goodwill is to be valued at 2 years purchase of the last 3 years average super profit. Calculate the goodwill of the firm.? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The capital of Nikita and Munna is rs.100000 and the market value of interest is 15%. Annual salary to partners is rs.6000 each. The profit for the last four years were rs.25000,rs.30000,rs.36000 and rs.42000. Goodwill is to be valued at 2 years purchase of the last 3 years average super profit. Calculate the goodwill of the firm.?.
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The capital of Nikita and Munna is rs.100000 and the market value of interest is 15%. Annual salary to partners is rs.6000 each. The profit for the last four years were rs.25000,rs.30000,rs.36000 and rs.42000. Goodwill is to be valued at 2 years purchase of the last 3 years average super profit. Calculate the goodwill of the firm.?, a detailed solution for The capital of Nikita and Munna is rs.100000 and the market value of interest is 15%. Annual salary to partners is rs.6000 each. The profit for the last four years were rs.25000,rs.30000,rs.36000 and rs.42000. Goodwill is to be valued at 2 years purchase of the last 3 years average super profit. Calculate the goodwill of the firm.? has been provided alongside types of The capital of Nikita and Munna is rs.100000 and the market value of interest is 15%. Annual salary to partners is rs.6000 each. The profit for the last four years were rs.25000,rs.30000,rs.36000 and rs.42000. Goodwill is to be valued at 2 years purchase of the last 3 years average super profit. Calculate the goodwill of the firm.? theory, EduRev gives you an
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