Fundamentals of...

When the business is taken over by another business, the excess of purchase consideration over its net value asset is referred to as ____.

When a product plays important role in increasing the goodwill of the firm, what factor is mainly responsible for that?

In the case of going concern when business is not to be sold, it becomes necessary to value goodwill whenever the mutual rights of the partners change. A party which is making a sacrifice must be compensated and that is normally on the basis of ______.

Calculate the average profit of last four year's profits. The profits of the last four years were:

Calculate goodwill at twice the weighted average profits of last four years’ profits. The profits of the last four years were:

Business showed that the capital employed on January 1, 2007 was Rs. 4,50,000 and the profits for the last five years were as follows: 2007-Rs. 40,000; 2008 -Rs.50,000; 2009- Rs. 60,000; 2010 -Rs. 70,000 and 2011 -Rs.80,000.You are required to find out the value of goodwill, based on three year's purchase of the super profit of the business given that the normal rate of return is 10%.

A firm earns Rs. 65,000 as its average profits. The usual rate of earning is 10%. The total assets of the firm amounted to Rs. 6,80,000 and liabilities are Rs.1,80,000. Calculate the value of goodwill.

Verma Brothers earn a profit of Rs. 90,000 with a capital of Rs. 4,00,000. The normal rate of return in the business is 15%. Use Capitalization of super profit method to value the goodwill.

A firm earned net profits during the last three years as:

The capital investment of the firm is Rs.1,20,000. A fair return on the capital having regard to the risk involved is 10%. Calculate the value of goodwill on the basis of three year's purchase of the super profit for the last three year.

The average net profits expected of a firm in future are Rs.68,000 per year and capital invested in the business by the firm is Rs.3,50,000. The rate of interest expected from Capital invested in this class of business is 12%. The remuneration of the partners is Estimated to be Rs.8,000 for the year. You are required to find out the super profit.