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Question -

Rajan and Rajani are partners in a firm. Their capitals were Rajan ₹. 3, 00,000; Rajani ₹. 2, 00,000. During the year 2015 the firm earned a profit of ₹. 1, 50,000. Calculate the value of goodwill of the firm assuming that the normal rate of return is 20%?



Answer -


Rajan’s Capital

3,00,000

Rajni’s Capital

2,00,000

Total Capital Employed

5,00,000

Normal Rate of Return = 20%

Alternative Method
Normal Profit = Capital Employed × 

= ₹ 2, 50,000

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