From the following particulars relating to the business of Georg. Compute the value of goodwill on the basis of three years purchase of super profit taking average of last four. Fixed assets 800,000 Current assets 80,000 Current liabilities 160,000 Normal rate of return 15% Managerial remuneration if employed elsewhere $10,000 per annum. Profits of the last four years were $120,000, 130,000, 140,000 and 150,000 respectively.
From the following particulars relating to the business of Georg. Compute the value of goodwill on the basis of three years purchase of super profit taking average of last four. Fixed assets 800,000 Current assets 80,000 Current liabilities 160,000 Normal rate of return 15% Managerial remuneration if employed elsewhere $10,000 per annum. Profits of the last four years were $120,000, 130,000, 140,000 and 150,000 respectively.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
From the following particulars relating to the business of Georg.
Compute the value of goodwill on the basis of three years purchase of super profit taking average of last four.
Fixed assets 800,000
Current assets 80,000
Current liabilities 160,000
Normal rate of return 15%
Managerial remuneration if employed elsewhere $10,000 per annum. Profits of the last four years were $120,000, 130,000, 140,000 and 150,000 respectively.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 6 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education