12th Class
Accountancy
Goodwill
Question Bank
MCQs - Goodwill : Nature And Valuation
question_answer
A business earned average profits of Rs.6,00,000 during the last few years. The normal rate of profits in the similar type of business is 10%. The total value of assets and liabilities of the business were Rs.22,00,000 and Rs.5,60,000 respectively. Calculate the value of goodwill of the firm by super profit method if the goodwill is valued at 2.5 years purchase of super profits. Goodwill of the firm will be: