how does one calculate goodwill by super profit method
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Answer / nagaraj
When the actual profit is more than the expected profit or
normal profit of a firm, it is called ‘Super Profit.’ Under
this method goodwill is to be calculate of on the following
manner:
Goodwill = Super Profit x Number of Years Purchase
CAPITAL EMPLOYED = Rs. 7,30,49,249
Financial Year Product
2006-07 2,60,40,742.63
2007-08 77,77,726.00
2008-09 1,34,84,208.75
2009-10 2,83,01,883.14
TOTAL 7,56,04,560.00
(Rounded off
Average Profit = Rs. 75604560 /4 = Rs. 1,89,01,140
Normal Profit = Rs. 7,30,49,249x 10/100 = Rs. 73,04,925
Super Profit = Actual/Average Profit - Normal Profit
Super Profit = Rs. 1,89,01,140-Rs. 73,04,925= Rs.
1,15,96,215
Goodwill = Rs. 1,15,96,215 x 3 = Rs. 3,47,88,645
| Is This Answer Correct ? | 36 Yes | 2 No |
Answer / shakir hussain
it can capsulated our work, it is small is size, we can
carry calculator to any where, it also so cheap,
you usually used in shop, or any place where a calcuation
is required,.
| Is This Answer Correct ? | 10 Yes | 19 No |
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