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calculate goodwill on basis of 3year purchase of super profitaverage capital employed 30000rate of return 12%rate of risk in capital invested 3%mgt remuneration of properitor 7500paprofits 2014-1500 , 2015-18000, 2016(loss) -2000, 2017-22000
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calculate goodwill on basis of 3year purchase of super profitaverage c...
To calculate goodwill, we need to first calculate the average super profit for the past three years:

Super profit = Average profits - (Average capital employed x Rate of return on capital employed)

Average profits = (1500 + 18000 - 2000 + 22000)/4 = 13500

Average capital employed = 30000/3 = 10000

Rate of return on capital employed = 12%

Super profit = 13500 - (10000 x 12%) = 1500

Next, we need to adjust the super profit for the risk involved in the investment:

Adjusted super profit = Super profit x (1 - Rate of risk in capital invested) = 1500 x (1 - 3%) = 1455

Finally, we can calculate the goodwill:

Goodwill = Adjusted super profit x Number of years' purchase = 1455 x 3 = 4365

Therefore, the goodwill is $4,365.
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calculate goodwill on basis of 3year purchase of super profitaverage capital employed 30000rate of return 12%rate of risk in capital invested 3%mgt remuneration of properitor 7500paprofits 2014-1500 , 2015-18000, 2016(loss) -2000, 2017-22000 Related: Methods of Valuation of Goodwill - Valuation of Goodwill & Shares, Advanced Corporate Accounting?
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calculate goodwill on basis of 3year purchase of super profitaverage capital employed 30000rate of return 12%rate of risk in capital invested 3%mgt remuneration of properitor 7500paprofits 2014-1500 , 2015-18000, 2016(loss) -2000, 2017-22000 Related: Methods of Valuation of 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 calculate goodwill on basis of 3year purchase of super profitaverage capital employed 30000rate of return 12%rate of risk in capital invested 3%mgt remuneration of properitor 7500paprofits 2014-1500 , 2015-18000, 2016(loss) -2000, 2017-22000 Related: Methods of Valuation of 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 calculate goodwill on basis of 3year purchase of super profitaverage capital employed 30000rate of return 12%rate of risk in capital invested 3%mgt remuneration of properitor 7500paprofits 2014-1500 , 2015-18000, 2016(loss) -2000, 2017-22000 Related: Methods of Valuation of Goodwill - Valuation of Goodwill & Shares, Advanced Corporate Accounting?.
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