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A firm has received a profit during the last four years RS9000,RS9000,RS11000,RS17000 respectively the firm has capital investment of RS50000. A firm rate of return on investment is 15% p. a calculate goodwill by capitalisation of super profit method and capitalisation of Average profit method?
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A firm has received a profit during the last four years RS9000,RS9000,...
Capitalisation of Super Profit Method:
1. **Calculate Super Profit:**
- Super profit = Average profit - Normal profit
- Average profit = (9000 + 9000 + 11000 + 17000) / 4 = RS11500
- Normal profit = Capital investment * Rate of return = 50000 * 15% = RS7500
- Super profit = RS11500 - RS7500 = RS4000
2. **Goodwill Calculation:**
- Goodwill = Super profit * Capitalisation rate
- Capitalisation rate = 100 / Rate of return = 100 / 15% = 6.67
- Goodwill = RS4000 * 6.67 = RS26680

Capitalisation of Average Profit Method:
1. **Calculate Capitalised Value:**
- Capitalised value = Average profit / Rate of return
- Capitalised value = RS11500 / 15% = RS76667
2. **Calculate Goodwill:**
- Goodwill = Capitalised value - Capital investment
- Goodwill = RS76667 - RS50000 = RS26667
In conclusion, using the capitalisation of super profit method, the goodwill is calculated to be RS26680, whereas using the capitalisation of average profit method, the goodwill is calculated to be RS26667.
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A, B and C are partners sharing profits and losses in the ratio of 2 : 1 : 1 respectively.On 31st March, 2012, their balance sheet was as follows:A died on 1st April, 2012. The firm had taken a joint life policy for Rs 1,20,000, the payment for which was received by the firm. According to the partnership deed, on retirement or death of a partner, the goodwill of the firm was to be valued at 1½ times of the average profit for the last four years.The profits for the last four years were Rs 64,000, Rs 69,000, Rs 72,000 and Rs 75,000 respectively. For paying the amount due to A’s legal representative, B and C brought as much cash as would bring their capitals in profit sharing ratio and the firm would have a cash balance of Rs 3,000.Pass journal entries to record the above mentioned transactions and prepare partners’ capital accounts.?

A, B and C are partners sharing profits and losses in the ratio of 2 : 1 : 1 respectively.On 31st March, 2012, their balance sheet was as follows:A died on 1st April, 2012. The firm had taken a joint life policy for Rs 1,20,000, the payment for which was received by the firm. According to the partnership deed, on retirement or death of a partner, the goodwill of the firm was to be valued at 1½ times of the average profit for the last four years.The profits for the last four years were Rs 64,000, Rs 69,000, Rs 72,000 and Rs 75,000 respectively. For paying the amount due to A’s legal representative, B and C brought as much cash as would bring their capitals in profit sharing ratio and the firm would have a cash balance of Rs 3,000.Pass journal entries to record the above mentioned transactions and prepare partners’ capital accounts. in this question how b capital become 88750 and c capital will become 68750?

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A firm has received a profit during the last four years RS9000,RS9000,RS11000,RS17000 respectively the firm has capital investment of RS50000. A firm rate of return on investment is 15% p. a calculate goodwill by capitalisation of super profit method and capitalisation of Average profit method?
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A firm has received a profit during the last four years RS9000,RS9000,RS11000,RS17000 respectively the firm has capital investment of RS50000. A firm rate of return on investment is 15% p. a calculate goodwill by capitalisation of super profit method and capitalisation of Average profit method? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about A firm has received a profit during the last four years RS9000,RS9000,RS11000,RS17000 respectively the firm has capital investment of RS50000. A firm rate of return on investment is 15% p. a calculate goodwill by capitalisation of super profit method and capitalisation of Average profit method? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A firm has received a profit during the last four years RS9000,RS9000,RS11000,RS17000 respectively the firm has capital investment of RS50000. A firm rate of return on investment is 15% p. a calculate goodwill by capitalisation of super profit method and capitalisation of Average profit method?.
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