When the average profit is Rs. 25,000 and the normal profit is Rs. 15,000, super profit is __________

The monetary value of such advantage is termed as ____________

The company earns a net profit of Rs. 24,000 with a capital of Rs. 1,20,000. The NRR is 10% under capitalisation of super profit goodwill will be ___________

Goodwill is not a ________ asset

Find the odd one out
(a) Average profit method
(b) Straight line method
(c) Super profit
(d) Capitalisation method

(i) Goodwill acquired by making payment in cash or kind is called acquired or purchased goodwill.
(ii) Weighted average profit method, goodwill is calculated by multiplying the weighted average profit by a certain number of years of purchase.
(iii) Normal profit = Capital employed x Fixed assets
(a) (i) is correct
(b) (i) and (ii) are correct
(c) (ii) and (iii) are correct
(d) (i), (ii) and (iii) are correct

Find out the wrong pair

The following are the profits of a firm in the last five years:
2014: Rs. 10,000; 2015: Rs. 11,000; 2016: Rs. 12,000; 2017: Rs. 13,000 and 2018: Rs. 14,000
Calculate the value of goodwill at 2 years purchase of average profit of five years.

Why is goodwill considered as an intangible asset but not a fictitious assets?

From the following information relating to Arul enterprises, calculate the value of goodwill on the basis of 2 years purchase of the average profits of 3 years.
(a) Profits for the years ending 31^st December 2016, 2017 and 2018 were Rs. 46,000, Rs. 44,000 and Rs. 50,000 respectively.
(b) A non-recurring income of Rs. 5,000 is included in the profits of the year 2016.
(c) The closing stock of the year 2017 was overvalued by Rs. 10,000.

The following particulars are available in respect of the business carried on by a partnership firm:
(i) Profits earned: 2016: Rs. 25,000; 2017: Rs. 23,000 and 2018: Rs. 26,000.
(ii) Profit of 2016 includes a non-recurring income of Rs. 2,500.
(iii) Profit of 2017 is reduced by Rs. 3,500 due to stock destroyed by fire.
(iv) The stock was not insured. But, it is decided to insure the stock in future. The insurance premium is estimated to be Rs. 250 per annum.
You are required to calculate the value of goodwill of the firm on the basis of 2 years purchase of average profits of the last three years.

Calculate the value of goodwill at 2 years purchase of average profit when average profit is Rs. 15,000

Explain the classification of goodwill.

A partnership firm earned net profits during the last three years as follows:
2016 : Rs. 20,000; 2017 : Rs. 17,000 and 2018 : Rs. 23,000
The capital investment of the firm throughout the above mentioned period has been Rs. 80,000. Having regard to the risk involved, 15% is considered to be a fair return on capital employed in the business. Calculate the value of goodwill on the basis of 2 years purchase of super profit.

A partnership firm has decided to value its goodwill for the purpose of setting a retiring Partner. The profit of that firm for the last four years were as follows:
2015 : Rs.20,000; 2016 : Rs.25,000; 2017; Rs.24,000 and 2018: Rs.23,000
The business was looked after by a partner. No remuneration was paid to him. The fair remuneration of the partner valued at comes to Rs. 3,000 per annum.
Find out the value of goodwill, if it is valued on the basis of three years purchase of the average profit of the last four years.

From the following information, find out the value of goodwill by capitalisation method: 
(a) Average profit = Rs. 60,000
(b) Normal rate of return = 10%
(c) Capital employed = Rs. 5,60,000