Accountancy Part AAdmission of a Partner

Capital Employed in a partnership firm is ₹50,00,000. Its average pro…

Capital Employed in a partnership firm is ₹50,00,000. Its average profit is ₹6,00,000. The normal rate of return in similar type of business is 10%. The amount of super profit is:

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → ₹1,00,000

Normal profit = Capital employed × Normal rate of return

= ₹50,00,000 × 10/100 = ₹5,00,000

Super profit = Average profit − Normal profit

= ₹6,00,000 − ₹5,00,000 = ₹1,00,000

NCERT (2026-27 edition):
Super Profits Method – “… Suppose an existing firm earns Rs. 18,000 on the capital of Rs. 1,50,000 and the normal rate of return is 10%. The Normal profits will work out at Rs. 15,000 (1,50,000 × 10/100). The super profits in this case will be Rs. 3,000 (Rs. 18,000 – 15,000). The goodwill under the super profit method is ascertained by multiplying the super profits by certain number of years’ purchase.”