Advertisements
Advertisements
Question
|
P, Q and R are partners running a departmental store and sharing profits equally. R started a new business of his own and since R was unable to devote any time to the existing business, they decided that R will get 1/5th in future profits. They also decided to make adjustment for goodwill on the basis of 3 years purchase of super profits of last 5 years. Capital investment of the firm is ₹ 15,00,000 and a fair return on capital is 12%. Profits of the last 5 years were as follows: Year Profit (₹) Profit for the year ended 31st March 2020: 1,60,000 Profit for the year ended 31st March 2023: 4,00,000 Profit for the year ended 31st March 2024: 3,00,000 |
On the basis of above information, answer the following:
Value of goodwill of the firm will be ______.
Options
₹ 60,000
₹ 84,000
₹ 80,000
₹ 20,000
Advertisements
Solution
Value of goodwill of the firm will be ₹ 60,000.
Explanation:
Super Profit = ₹ 2,00,000 − ₹ 1,80,000 = ₹ 20,000
Goodwill = ₹ 20,000 × ₹ 3
= ₹ 60,000
