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​Find the goodwill of the firm using capitalization method from the following information: Total Capital Employed in the firm Rs. 8,00,000 Reasonable Rate of Return 15% Profits for the year Rs. 12,00,000
  • a)
    Rs. 82,00,000.
  • b)
    Rs. 12,00,000.
  • c)
    Rs. 72,00,000.
  • d)
    Rs. 42,00,000
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
Find the goodwill of the firm using capitalization method from the fol...

To find the goodwill of the firm using the capitalization method, we can follow these steps:
1. Calculate the reasonable rate of return:
- Reasonable Rate of Return = Total Capital Employed * Rate of Return
- Reasonable Rate of Return = Rs. 8,00,000 * 15% = Rs. 1,20,000
2. Calculate the super profit:
- Super Profit = Profit for the year - Reasonable Rate of Return
- Super Profit = Rs. 12,00,000 - Rs. 1,20,000 = Rs. 10,80,000
3. Determine the value of goodwill:
- Goodwill = Super Profit * 100 / Rate of Return
- Goodwill = Rs. 10,80,000 * 100 / 15% = Rs. 72,00,000
Therefore, the goodwill of the firm using the capitalization method is Rs. 72,00,000.
The correct answer is option C: Rs. 72,00,000.
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Find the goodwill of the firm using capitalization method from the following information: Total Capital Employed in the firm Rs. 8,00,000 Reasonable Rate of Return 15% Profits for the year Rs. 12,00,000a)Rs. 82,00,000.b)Rs. 12,00,000.c)Rs. 72,00,000.d)Rs. 42,00,000Correct answer is option 'C'. Can you explain this answer?
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Find the goodwill of the firm using capitalization method from the following information: Total Capital Employed in the firm Rs. 8,00,000 Reasonable Rate of Return 15% Profits for the year Rs. 12,00,000a)Rs. 82,00,000.b)Rs. 12,00,000.c)Rs. 72,00,000.d)Rs. 42,00,000Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Find the goodwill of the firm using capitalization method from the following information: Total Capital Employed in the firm Rs. 8,00,000 Reasonable Rate of Return 15% Profits for the year Rs. 12,00,000a)Rs. 82,00,000.b)Rs. 12,00,000.c)Rs. 72,00,000.d)Rs. 42,00,000Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Find the goodwill of the firm using capitalization method from the following information: Total Capital Employed in the firm Rs. 8,00,000 Reasonable Rate of Return 15% Profits for the year Rs. 12,00,000a)Rs. 82,00,000.b)Rs. 12,00,000.c)Rs. 72,00,000.d)Rs. 42,00,000Correct answer is option 'C'. Can you explain this answer?.
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