Question:medium

Abha & Sara capital: ₹3L, ₹2L.
Profits: ₹60k, ₹90k, ₹1.2L
(i) 4 years purchase of avg. profits
(ii) Super profit capitalisation @10%

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Super Profit = Avg Profit – Normal Profit
Updated On: Jan 14, 2026
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Solution and Explanation

Average Profit: ₹90,000
Goodwill Calculation (Method 1): 4 × ₹90,000 = ₹3,60,000
Capital Employed: ₹5,00,000
Normal Rate of Return (NRR): 10%
Normal Profit: 10% of ₹5,00,000 = ₹50,000
Super Profit: ₹90,000 (Average Profit) – ₹50,000 (Normal Profit) = ₹40,000
Goodwill Calculation (Method 2): ₹40,000 (Super Profit) × 100 / 10 (NRR) = ₹4,00,000
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