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Average profit is ₹180000. Capital employed is ₹1200000 and normal return is (11%). What is goodwill by super profit method at 4 years' purchase?

Answer and explanation

Correct answer: ₹192000

Normal profit is (1200000 \times 11% = ₹132000). Super profit is ₹48000 and goodwill is (48000 \times 4 = ₹192000).

Related tags

Super Profit MethodNormal ProfitValuationGoodwill AccountingReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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