ILLUSTRATION 6. (All Variations of Super Profit Method).Following particulars...
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ILLUSTRATION 6. (All Variations of Super Profit Method).Following particulars are available in respect of the business carried on by a trader : (i) Profits earned for three years : 2013-14 $ 2,00,000 ; 2014-15 $ 2,40,000; 2015-16 $ 2,20,000. = (ii) Normal rate of return 10% (iii) Capital employed $ 12,00,000 (iv) Present value of an annuity of one rupee for 5 years at 10% = 5 3.78 (v) The profits included non- recurring profit on an average basis of e 3,000. You are required to calculate the value of goodwill : (a) as per annuity method (b) as per capitalisation method by using Average Capital Employed
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