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Find the goodwill of the firm using capitalization method from the following information: Total capital employed in the firm Rs. 80,00,000 Reasonable rate of return 15% Profits for the year Rs. 12,00,000
  • a)
    Rs. 68,00,000.
  • b)
    Rs. 12,00,000.
  • c)
    Rs. 11,88,000.
  • d)
    Nil.
Correct answer is option 'A'. Can you explain this answer?
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Find the goodwill of the firm using capitalization method from the fol...
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Find the goodwill of the firm using capitalization method from the fol...
It's so simple just use the formula capitalisation method = normal value of business - capital employed goodwill by capitalization method = 80,00,000 - 12,00,000 = 68,00,000
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Find the goodwill of the firm using capitalization method from the fol...


Calculation of Goodwill using Capitalization Method:

Goodwill = (Average Profits / Rate of Return) - Capital Employed

Given Information:
- Total capital employed in the firm = Rs. 80,00,000
- Reasonable rate of return = 15%
- Profits for the year = Rs. 12,00,000

Calculation:
- Average Profits = Profits for the year = Rs. 12,00,000
- Goodwill = (12,00,000 / 0.15) - 80,00,000
- Goodwill = (80,00,000) - 80,00,000
- Goodwill = Rs. 68,00,000

Therefore, the goodwill of the firm using the capitalization method is Rs. 68,00,000.
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Find the goodwill of the firm using capitalization method from the following information: Total capital employed in the firm Rs. 80,00,000 Reasonable rate of return 15% Profits for the year Rs. 12,00,000a)Rs. 68,00,000.b)Rs. 12,00,000.c)Rs. 11,88,000.d)Nil.Correct answer is option 'A'. 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. 80,00,000 Reasonable rate of return 15% Profits for the year Rs. 12,00,000a)Rs. 68,00,000.b)Rs. 12,00,000.c)Rs. 11,88,000.d)Nil.Correct answer is option 'A'. 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. 80,00,000 Reasonable rate of return 15% Profits for the year Rs. 12,00,000a)Rs. 68,00,000.b)Rs. 12,00,000.c)Rs. 11,88,000.d)Nil.Correct answer is option 'A'. 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. 80,00,000 Reasonable rate of return 15% Profits for the year Rs. 12,00,000a)Rs. 68,00,000.b)Rs. 12,00,000.c)Rs. 11,88,000.d)Nil.Correct answer is option 'A'. Can you explain this answer?.
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