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BRILLIANT’S Long Term Financing and Valuation of Goodwill & Shares 221

(iv) Rate of risk return on capital invested in business / ì¶mnma ‘| {Zdo{eV H¡${nQ>b na [añH$ [aQ>Z© H$s
aoQ> - 2%.
(v) Remuneration from alternative employment of the proprietor (if not engaged in busi-
ness) ` 3,600 p.a.
àmoàm¶Q>a Ho$ d¡H$pënH$ amoOJma go nm[al{‘H$ (¶{X ì¶mnma ‘| {bßV Zht h¡)& ` 3,600 p.a.
You are required to compute the value of goodwill on the basis of 3 year's purchase of super
profits of the business calculated on the average profit of the last four years.
AmnH$mo {nN>bo Mma dfm] Ho$ EdaoO àm°{’$Q> na JUZm {H$¶o J¶o ì¶mnma Ho$ gwna àm°{’$Q²>g Ho$ 3 df© Ho$ nM}g Ho$ AmYma
na JwS>{db H$s d¡ë¶y H$s JUZm H$aZm h¡&

Solution:
(1) Calculation of Average Profit:
Particulars `

2012 12,200
2013 NPP 15,000
2014 (2,000)
2015 21,000
46,200

Average Profit = ` 46,200/4 = ` 11,550
(2) Calculation of Super Profits:

Particulars `
Average Profit 11,550
Less: Remuneration 3,600
Average Trading Profits 7,950
Less: Normal Profit @ 10% on ` 50,000 5,000
Super Profits 2,950

Goodwill = 3 year's purchase of super profits = ` 2,950 × 3 = ` 8,850
Illustration 3.1.13
From the following information, calculate value of goodwill taking 5 year's purchase of super
profit. / {ZåZ{b{IV gyMZm go gwna àm°{’$Q> H$s 5 df© H$s nM}g boH$a JwS>{db H$s d¡ë¶y H$s JUZm H$s{OE&
(i) Equity Share Capital: 5,000 Equity Shares of ` 20 each fully paid.
B[³dQ>r eo¶a H¡${nQ>b… < 20 à˶oH$ H$m ’w$ëbr noS> 5,000 B{³dQ>r eo¶g©
(ii) Preference Share Capital: 1,000, 8% Preference Shares of ` 100 each fully paid.
{à’$a|g eo¶a H¡${nQ>b…> <100 à˶oH$ H$m ’w$ëbr noS> 1000, 8% {à’$a|g eo¶g©