M/s. XYZ LLC gives the following information related to Profit for last 8 years - 2011 - OMR 25,000, 2012 - OMR 20,000, 2013 - OMR 35,000, 2014 - OMR 30,000, 2015 - OMR 45,000, 2017 - OMR 40,000, 2018 - OMR 55,000, 2019 - OMR 50,000. Further the concern giving you additional information that the concern normal expects the Rate of Return @ 10% for the Capital Employed OMR 250,000, Total Tangible Assets OMR 200,000 and Current Liabilities OMR 100,000. Compute the value of goodwill on the basis of 4 years purchase under Capitalization of Average Profit Method and Super Profit Method. Which method of goodwill calculation is beneficial for the firm? Why these two methods showing two different values? Give your comments with the calculated values.
M/s. XYZ LLC gives the following information related to Profit for last 8 years - 2011 - OMR 25,000,
2012 - OMR 20,000, 2013 - OMR 35,000, 2014 - OMR 30,000, 2015 - OMR 45,000, 2017 - OMR
40,000, 2018 - OMR 55,000, 2019 - OMR 50,000. Further the concern giving you additional
information that the concern normal expects the
OMR 250,000, Total Tangible Assets OMR 200,000 and Current Liabilities OMR 100,000.
Compute the value of
Profit Method and Super Profit Method. Which method of goodwill calculation is beneficial for
the firm? Why these two methods showing two different values? Give your comments with the
calculated values.
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 1 images
