The calculation of goodwill is to be performed using the Average Super Profit Method, defined as:\[\text{Goodwill} = \text{Super Profit} \times \text{Number of years’ purchase}\]
Step 1: Calculate average profit for the last 3 years\[\text{Total Profit} = ₹ 3,00,000 + ₹ 2,60,000 + ₹ 4,00,000 = ₹ 9,60,000\]\[\text{Average Profit} = \frac{₹ 9,60,000}{3} = ₹ 3,20,000\]
Step 2: Calculate Normal ProfitThe formula is:\[\text{Normal Profit} = \text{Capital Employed} \times \frac{\text{Normal Rate of Return}}{100}\]\[\text{Normal Profit} = ₹ 20,00,000 \times \frac{12}{100} = ₹ 2,40,000\]Partner salaries are provided:- Salary to Sumit = ₹ 20,000 - Salary to Asha = ₹ 20,000 - Total salaries = ₹ 40,000If salaries were not already adjusted in the average profit, the calculation would be:\[\text{Normal Profit including salary} = ₹ 2,40,000 + ₹ 40,000 = ₹ 2,80,000\]
Step 3: Calculate Super Profit\[\text{Super Profit} = \text{Average Profit} – \text{Normal Profit}= ₹ 3,20,000 – ₹ 2,80,000 = ₹ 40,000\]
Step 4: Calculate Goodwill\[\text{Goodwill} = ₹ 40,000 \times 4 = ₹ 1,60,000\]⛔️ Correction: The problem states that the ₹ 20,000 salary is annual for each partner, and the average profit is already adjusted for salaries. Therefore, adding the salary again in Step 2 is incorrect.Revised Calculation:
✅ Revised Step 2: Normal Profit = ₹ 2,40,000 (Salary already accounted for)✅ Super Profit = ₹ 3,20,000 – ₹ 2,40,000 = ₹ 80,000✅ Goodwill = ₹ 80,000 × 4 = ₹ 3,20,000
% Final Correct Answer Final Correct Answer: ₹ 3,20,000