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explain 10. A partnership firm earned net profits during the last 3 years as follows Year Net Profit 2007-2008 2008-2009 2010-2011 1,90,000 2.20,000 2,50,000 The
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10. A partnership firm earned net profits during the last 3 years as follows Year Net Profit 2007-2008 2008-2009 2010-2011 1,90,000 2.20,000 2,50,000 The capital employed in the firm throughout the above mentioned period has been Rs. 4,00,000. Having regard to the risk involved, 15% is considered to be a fair return on the capital. The remuneration of all th partners during this period is estimated to be Rs. 1,00,000 per annum. Calculate the value of goodwill on the basis of (1) 2 years' purchase of super profits earned on average basis during the above mentioned 3 years and (ii) By capitalisation methodStep by Step Solution
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