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A firm earns profit of 5,00,000. Normal Rate of Return in a similar type of business is 10%. The
value of total assets (excluding goodwill) and
total outsiders' liabilities as on the date of goodwill are
*55,00,000 and 14,00,000 respectively. Calculate
value of goodwill according to Capitalisation of Super
Profit Method as well as Capitalisation of
Average Profit Method.
[Ans.: Goodwill-9,00,000 in both cases.]
20.000. The current liabilities were

Why we consider 5,00,000 as Average profit even Question doesn't said that.​

Answer :

poojaryrakshita

Answer:

In this case, we are considering the profit of 5,00,000 as the average profit for the calculation of goodwill using the Capitalisation of Super Profit Method and Capitalisation of Average Profit Method. This assumption is made based on the information provided in the question and the context of calculating goodwill using these methods.

The question mentions that the firm earns a profit of 5,00,000. In such valuation methods, the profit figure provided is typically used as the basis for calculating goodwill. Since the profit of 5,00,000 is given, it is considered the average profit for the calculation of goodwill in this scenario.

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