Accountancy

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Accountancy

A business has earned average profit of rs 8000 during the last few years and the normal rate of return in similar type of business is 10% . Find out the value of goodwill by captalization method, give that the assets of the firm amount to Rs 600000 and luabilities to Rs 100000

Accountancy

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Answer 1

Answer #1

Capitalused value of average profits = 8000×100/10=800000

Goodwill=capitalused value - net assets

= 800000-500000(600000-100000=300000

answered by: Advika

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Answer 2

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