a fictitious asset (d) Goodwill cannot be acquired . Super profit is the difference between (a) Capital employed and average profit (b) Assets and liabilities (c) Average profit and normal profit (d) Current year’s profit and average profit . The average rate of return of similar concerns is considered as (a) Average profit (b) Normal rate of return (c) Expected rate of return (d) None of these . Which of the following is true?
(a) Super profit = Total profit / number of years (b) Super profit = Weighted profit / number of years (c) Super profit = Average profit – Normal profit (d) Super profit = Average profit × Years of purchase . Identify the incorrect pair (a) Goodwill under Average profit method - Average profit × Number of years of purchase (b) Goodwill under Super profit method - Super profit × Number of years of purchase (c) Goodwill under Annuity method - Average profit × Present value annuity factor (d) Goodwill under Weighted average - Weighted average profit × Number of years of profit method purchase . When the average profit is ` , and the normal profit is ` , , super profit is (a) ` , (b) ` , (c) ` , (d) ` , . Book profit of is ` , ; non-recurring income included in the profit is ` , and abnormal loss charged in the year was ` , , then the adjusted profit is (a) ` , (b) ` , (c) ` , (d) ` , .
The total capitalised value of a business is ` , , ; assets are ` , , and liabilities are ` , . The value of goodwill as per the capitalisation method will be (a) ` , (b) ` , (c) ` , , (d) ` , Answers (a) (c) (b) (c) (c) (c) (a) (d) II Very short answer questions . What is goodwill? .
What is acquired goodwill? . What is super profit? What is normal rate of return?
State any two circumstances