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The average capital employed in a business Rs.3,00,000 and average net profit earned is Rs. 42000. The normal rate of return on capital employed is 10%. The goodwill of the firm based on 3 years, purchase of super profit will be: 01 (a) Rs. 36000 (b)Rs. 30000 (c) Rs. 4200 (d) Rs. 12000?
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The average capital employed in a business Rs.3,00,000 and average net...
To find the goodwill of the firm based on 3 years of super profit, you need to first calculate the super profit. Super profit is the amount of profit earned above the normal rate of return on capital employed. In this case, the normal rate of return is 10%, so you can calculate the super profit by subtracting the normal rate of return from the net profit:
Super profit = Net profit - (Normal rate of return x Capital employed)
= 42000 - (10% x 300000)
= 42000 - 30000
= 12000
The goodwill of the firm based on 3 years of super profit can then be calculated by multiplying the super profit by the number of years:
Goodwill = Super profit x Number of years
= 12000 x 3
= 36000
Therefore, the goodwill of the firm based on 3 years of super profit is Rs. 36000. The answer is (a) Rs. 36000.
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The average capital employed in a business Rs.3,00,000 and average net...
Calculation of Normal Profit:
- The normal rate of return on capital employed is 10%.
- Therefore, the normal profit would be 10% of the average capital employed.
- Average capital employed = Rs. 3,00,000
- Normal profit = 10% of Rs. 3,00,000 = Rs. 30,000
Calculation of Super Profit:
- Super profit is the excess profit earned over and above the normal profit.
- Average net profit earned = Rs. 42,000
- Super profit = Average net profit - Normal profit
- Super profit = Rs. 42,000 - Rs. 30,000 = Rs. 12,000
Calculation of Goodwill:
- Goodwill can be calculated by multiplying the super profit by the number of years of purchase.
- Number of years of purchase = 3 years
- Goodwill = Super profit * Number of years of purchase
- Goodwill = Rs. 12,000 * 3 = Rs. 36,000
Therefore, the goodwill of the firm based on 3 years' purchase of super profit will be Rs. 36,000. Hence, option (a) Rs. 36,000 is the correct answer.
- The normal rate of return on capital employed is 10%.
- Therefore, the normal profit would be 10% of the average capital employed.
- Average capital employed = Rs. 3,00,000
- Normal profit = 10% of Rs. 3,00,000 = Rs. 30,000
Calculation of Super Profit:
- Super profit is the excess profit earned over and above the normal profit.
- Average net profit earned = Rs. 42,000
- Super profit = Average net profit - Normal profit
- Super profit = Rs. 42,000 - Rs. 30,000 = Rs. 12,000
Calculation of Goodwill:
- Goodwill can be calculated by multiplying the super profit by the number of years of purchase.
- Number of years of purchase = 3 years
- Goodwill = Super profit * Number of years of purchase
- Goodwill = Rs. 12,000 * 3 = Rs. 36,000
Therefore, the goodwill of the firm based on 3 years' purchase of super profit will be Rs. 36,000. Hence, option (a) Rs. 36,000 is the correct answer.
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The average capital employed in a business Rs.3,00,000 and average net profit earned is Rs. 42000. The normal rate of return on capital employed is 10%. The goodwill of the firm based on 3 years, purchase of super profit will be: 01 (a) Rs. 36000 (b)Rs. 30000 (c) Rs. 4200 (d) Rs. 12000?
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The average capital employed in a business Rs.3,00,000 and average net profit earned is Rs. 42000. The normal rate of return on capital employed is 10%. The goodwill of the firm based on 3 years, purchase of super profit will be: 01 (a) Rs. 36000 (b)Rs. 30000 (c) Rs. 4200 (d) Rs. 12000? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about The average capital employed in a business Rs.3,00,000 and average net profit earned is Rs. 42000. The normal rate of return on capital employed is 10%. The goodwill of the firm based on 3 years, purchase of super profit will be: 01 (a) Rs. 36000 (b)Rs. 30000 (c) Rs. 4200 (d) Rs. 12000? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The average capital employed in a business Rs.3,00,000 and average net profit earned is Rs. 42000. The normal rate of return on capital employed is 10%. The goodwill of the firm based on 3 years, purchase of super profit will be: 01 (a) Rs. 36000 (b)Rs. 30000 (c) Rs. 4200 (d) Rs. 12000?.
The average capital employed in a business Rs.3,00,000 and average net profit earned is Rs. 42000. The normal rate of return on capital employed is 10%. The goodwill of the firm based on 3 years, purchase of super profit will be: 01 (a) Rs. 36000 (b)Rs. 30000 (c) Rs. 4200 (d) Rs. 12000? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about The average capital employed in a business Rs.3,00,000 and average net profit earned is Rs. 42000. The normal rate of return on capital employed is 10%. The goodwill of the firm based on 3 years, purchase of super profit will be: 01 (a) Rs. 36000 (b)Rs. 30000 (c) Rs. 4200 (d) Rs. 12000? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The average capital employed in a business Rs.3,00,000 and average net profit earned is Rs. 42000. The normal rate of return on capital employed is 10%. The goodwill of the firm based on 3 years, purchase of super profit will be: 01 (a) Rs. 36000 (b)Rs. 30000 (c) Rs. 4200 (d) Rs. 12000?.
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