12 :- Sakshi and Megha were partners sharing profits and losses in the ratio of 3:1. Capital employed as on 31st March, 2024 was Rs 14,00,000. Profit earned on an average is Rs 1,80,000. Calculate goodwill of the firm on the basis of 5 years purchase of Super profits, if the normal rate of return is 10%.
Solution :-
Calculation of normal profit
Normal Profit = Capital Employed × Normal Rate of Return
Normal Profit = Rs 14,00,000 × 10%
= Rs 1,40,000
Calculation of Super profit
Super Profit = Average Profit − Normal Profit
Super Profit = Rs 1,80,000 – Rs 1,40,000
= Rs 40,000
Calculation of Goodwill
Goodwill = Super Profit × Number of Years’ Purchase
Goodwill = Rs 40,000 × 5
= Rs 2,00,000