Question
From the following information, you are required to calculate the value of Goodwill by Capitalization Method:
1) Capitalization of Actual Average Profit
2) Capitalization of Super Profit
a. Actual Average Profit Rs. 60,000
b. Normal Rate of Return 10%
c. Actual Capital Employed Rs. 4,50,000
Answer :
Word Count : 93
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Capitalization of Actual Average Profit Method
- Formula: Goodwill=(Actual Average Profit×100Normal Rate of Return)−Actual Capital Employed\text{Goodwill} = \left(\frac{\text{Actual Average Profit} \times 100}{\text{Normal Rate ____ _________ ______ ______ ____ __________ ____ ____ _____.
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- Formula: Goodwill=(Actual Average Profit×100Normal Rate of Return)−Actual Capital Employed\text{Goodwill} = \left(\frac{\text{Actual Average Profit} \times 100}{\text{Normal Rate ____ _________ ______ ______ ____ __________ ____ ____ _____.
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