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प्रश्न
A business has earned average profit of ₹ 1,00,000 during the last few years. Find out the value of goodwill by capitalisation method, given that the assets of the business are ₹ 10,00,000 and its external liabilities are ₹ 1,80,000. The normal rate of return is 10%.
उत्तर
Goodwill = Capitalised Value of Average Profits - Actual Capital Employed
Capitalised Value of Average Profit
= Average Profit x `100/"Nominal Rate of Return"`
= 1,00,000 x `10/100` = Rs. 10,00,000
Actual Capital Employed = 10,00,000 - 1,80,000 = Rs. 8,20,000.
Goodwill = 10,00,000 - 8,20,000 = Rs. 1,80,000.
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संबंधित प्रश्न
Compute the value of goodwill on the basis of four years’ purchase of the average profits based on the last five years? The profits for the last five years were as follows:
| Rs. | |
| 2013 | 40,000 |
| 2014 | 50,000 |
| 2015 | 60,000 |
| 2016 | 50,000 |
| 2017 | 60,000 |
Sumit purchased Amit's business on 1st April, 2019. Goodwill was decided to be valued at two years' purchase of average normal profit of last four years. The profits for the past four years were:
| Year Ended | 31st March, 2016 | 31st March, 2017 | 31st March, 2018 | 31st March, 2019 |
| Profits (₹) | 80,000 | 145,000 | 160,000 | 200,000 |
Books of Account revealed that:
(i) Abnormal loss of ₹ 20,000 was debited to Profit and Loss Account for the year ended 31st March, 2016.
(ii) A fixed asset was sold in the year ended 31st March, 2017 and gain (profit) of ₹ 25,000 was credited to Profit and Loss Account.
(iii) In the year ended 31st March, 2018 assets of the firm were not insured due to oversight. Insurance premium not paid was ₹ 15,000.
Calculate the value of goodwill.
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| Year Ended | 31st March, 2015 | 31st March, 2016 | 31st March, 2017 | 31st March, 2018 | 31st March, 2019 |
| Profits (₹) | 20,000 | 24,000 | 30,000 | 25,000 | 18,000 |
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| Year ended | 31st March, 2019 | 31st March, 2018 | 31st March, 2017 |
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| Liabilities |
Amount (₹) |
Assets | Amount (₹) |
|
| Capital A/cs: | Furniture | 4,00,000 | ||
| Varuna | 5,00,000 | Computers | 3,00,000 | |
| Karuna | 5,00,000 | 10,00,000 | Electrical Fittings | 1,00,000 |
| Long-term Loan | 5,50,000 | Investments (Trade) | 2,00,000 | |
| Sundry Creditors | 2,00,000 | Stock | 3,00,000 | |
| Outstanding Expenses | 50,000 | Sundry Debtors | 3,00,000 | |
| Advances from Customers | 1,50,000 | Bills Receivable | 50,000 | |
| Cash in Hand | 50,000 | |||
| Cash at Bank | 2,00,000 | |||
| Deferred Revenue Expenditure: | ||||
| Advertisement Suspense | 50,000 | |||
| 19,50,000 | 19,50,000 | |||
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| Year | Result | Amount (₹) |
| 2015 | Profit | 5,000 |
| 2016 | Profit | 8,000 |
| 2017 | Loss | 3,000 |
| 2018 | Profit | 6,000 |
When we use the super profit method for goodwill Valuation:
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