A firm earns a profit of ₹37,000 per year In the same business a 10% return is generally expected - Accountancy - Reconstitution- Change in Existing Profit Sharing Ratio

Question

A firm earns a profit of ₹37,000 per year In the same
business a 10% return is generally expected The total assets of the
firm are ₹4,00,000 The value of other liabilities is 90,000
Find out the value of goodwill

Please answer as soon as possible I need it urgently

Praveen · Accepted Answer

CAPITALISATION METHOD

AP=37000
Assets=400000
Liabilities=90000
Rate of return=10%
Therefore, goodwill = capitalised value of AP - Net tangible
assets
Capitalised value of AP=37000 x 100/10=370000
Net assets=400000 - 90000= 310000
therefore goodwill=370000 - 310000=60000//

A firm earns a profit of ₹37,000 per year. In the same business a 10% return is generally expected. The total assets of the firm are ₹4,00,000. The value of other liabilities is 90,000. Find out the value of goodwill. Please answer as soon as possible.... I need it urgently

A firm earns a profit of ₹37,000 per year. In the same business a 10% return is generally expected. The total assets of the firm are ₹4,00,000. The value of other liabilities is 90,000. Find out the value of goodwill.

Please answer as soon as possible.... I need it urgently