Under super profit method goodwill is based on which profit?

Correct answer: Profit above normal profit

The direct answer is option A: goodwill under the super profit method is based on profit above normal profit. Normal profit is the amount a similar business is expected to earn on its capital at the normal rate. Super profit is calculated as actual average profit minus normal profit: \\(\\text{Super Profit}=\\text{Average Profit}-\\text{Normal Profit}\\). Goodwill is then commonly calculated as super profit multiplied by the agreed number of years' purchase. Option A is correct because the method values the firm's extra earning capacity. Option B, total sales, measures turnover rather than extra profit. Option C, cash deposit, is an asset balance and does not show earning capacity. Option D, total drawings, represents withdrawals by partners and is unrelated to goodwill valuation. Exam cue: normal profit is expected profit; super profit is the excess over it.