Enumerate two main steps involved in valuing the goodwill according to super profit method.

Post category:Accountancy
Reading time:1 mins read

SOLUTION

(i) Ascertain super profits by subtracting normal profits from average profits; (ii) Calculate goodwill by multiplying super profits with number of years’ purchase.

Please Share This Share this content

You Might Also Like

List any two items other than cash in hand and cheques in hand that are included in ‘Cash and Cash Equivalents’. (C.B.S.E. 2020, Punjab)

Current Liabilities of a company are Rs. 1,50,000. Its Current Ratio is 3 : 1 and Acid Test Ratio (Liquid Ratio) is 1 : 1. Calculate values of Current Assets, Liquid Assets and Inventory.

State giving reason, whether the trade receivables turnover ratio will: (a) increase, (b) decrease, or (c) not alter because of ‘cash collected from trade receivables’.

Leave a Reply Cancel reply

Share this content