Calculate goodwill of the firm by super profit method if goodwill is valued at 2 years purchase and Capital employed is ₹1,00,000 and market rate of return is 15%. Net profit earned by the firm for the last 3 year is ₹1,08,000?

₹42,000

The correct answer is option 1- ₹42,000.

Normal profit = 1,00,000 x 15/100
                     = ₹15,000

Average profit = 1,08,000/3
                       = ₹36,000

Super profit = 36,000-15,000
                   = ₹21,000

Goodwill = 21,000*2
              = ₹42,000