Identify the steps involved in calculating goodwill under the capitalization of super profits method:

(A) Calculate capital of the firm, which is equal to total assets (excluding goodwill and fictitious assets) minus outside liabilities
(B) Multiply the super profits by the required rate of return multiplier
(C) Calculate normal profits on capital employed
(D) Calculate super profits by deducting normal profits from average profits
(E) Calculate average profit for past years

Choose the correct answer from the options given below:

(A), (C), (E), (D), (B)

The correct answer is Option (2) → (A), (C), (E), (D), (B)

Here are the steps in correct order:

1. (A) Calculate Capital Employed = Total Assets (excluding goodwill & fictitious assets) − Outside Liabilities.

2. (C) Calculate Normal Profits = Capital Employed × Normal Rate of Return / 100.

3. (E) Calculate Average Profits based on past years.

4. (D) Calculate Super Profits = Average Profits − Normal Profits.

5. (B) Calculate Goodwill = Super Profits × (100 / Normal Rate of Return)
   (i.e., Capitalization of Super Profits)