Ideal Marketing Earned An Average Profit of ₹ 4,00,000 During the Last Five Years - Bzziii.com

Ideal Marketing earned an average profit of ₹ 4,00,000 during the last five years. Normal rate of return on capital employed is 10%. Balance Sheet of

Ideal Marketing earned an average profit of ₹ 4,00,000 during the last five years. Normal rate of return on capital employed is 10%. Balance Sheet of the firm as at 31st March, 2019 was as follows:

LiabilitiesAmount
(₹)
AssetsAmount
​(₹)
Capital A/cs: Land and Building10,00,000
Shyam5,00,000Furniture2,00,000
Sunder5,00,00010,00,000Investments1,00,000
Current A/cs: Sundry Debtors5,00,000
Shyam2,00,000Bills Receivable50,000
Sunder2,00,0004,00,000Closing Stock3,00,000
Reserves3,40,000Cash in Hand50,000
Sundry Creditors4,00,000Cash at Bank1,00,000
Bills Payable1,00,000 
Outstanding Expenses60,000 
 23,00,000  23,00,000  

Calculate the value of goodwill, if it is valued at three years’ purchase of Super Profit.




Average Profits = 4,00,000

Capital Employed=Total Assets - Non-Trade Investments- Outside Liabilities

= (23,00,000-1,00,000-5,60,000)

= 16,40,000

Calculation for Normal Profit :

Normal Profits =

= `"Capital Employed x Normal Rate of Return"/"100"`

=16,40,000 x `frac{10}{100}`






Hello, welcome to the GovtCareerAssam blog! I'm Dipankar Baruah, the author and admin, here to provide you valuable information on government careers in Assam.