Question :  Under the super profit method, goodwill is calculated by

Option 1: Number of years purchase X Average profit

Option 2: Number of years purchase X Super profit

Option 3: super profit/normal rate of return

Option 4: super profit - normal profit 

Question : Average of the profit of past agreed years is known as __________.

Option 1: super profit 

Option 2: normal profit 

Option 3: average profit 

Option 4: capital employed 

Question :

The Formula for Capitalisation of Super Profit Method is:

Option 1: Super Profit X No. of years Purchase

Option 2: Super Profit X 100/Normal rate of return

Option 3: (Super Profit - Normal Profit) 100 / Normal Rate of Return

Option 4: None of the above

Question : Under the Capitalisation Method of valuation of Goodwill, the formula for calculating goodwill is:

Option 1: Super profits multiplied by the rate of return

Option 2: Average profits multiplied by the rate of return

Option 3: Super profits are divided by the rate of return

Option 4: Average profits divided by the rate of return

Question : A firm earned average profit of Rs.45.000. Rate of return on capital employed is 12% p.a. Total capital employed is Rs.4,00,000. Goodwill on the basis of two years purchase of super profit is:

Option 1: Rs.6,000

Option 2: Rs.12,000

Option 3: Rs.18,000

Option 4: None of these