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222 Corporate Finance BRILLIANT’S

(iii) General Reserve: ` 30,000. / OZab [aOd©… < 30,000
(iv) Loss on revaluation of Plant and Machinery: ` 12,000
ßbm§Q> Ed§ ‘erZar Ho$ [ad¡ë¶yEeZ na bm°g… ` 12,000
(v) Average trading profit after tax: ` 30,000 / Q>¡³g Ho$ níMmV² EdaoO Q´>oqS>J àm°{’$Q>… < 30,000

(vi) Normal rate of return on capital employed: 12%. / à¶w³V H¡${nQ>b na [aQ>Z© H$s gm‘mݶ aoQ>>… 12%
Solution:
1. Calculation of capital Employed:

Particulars `
(i) Equity Share Capital (5,000 × ` 20) 1,00,000
(ii) Preference Share Capital (1,000 × ` 100) 1,00,000
(iii) General Reserve 30,000
2,30,000
Less: Revaluation Loss of Plant 12,000
Capital Employed 2,18,000
2. Computation of Avg. Maintainable Trading Profit:

Particulars `
Average Trading Profit after Tax 30,000
Less: Normal Return on Capital Employed [10% of ` 2,18,000] 21,800
Super Profit 8,200

Goodwill = 5 year's purchase of super profit = 5 × ` 8,200 = ` 41,000.
Illustration 3.1.14
Following is the Balance Sheet of Black berry Ltd. as on 31.3.2016:
31.3.2016 H$mo ãb¡H$ ~oar {b{‘Q>oS> H$s ~¡b|gerQ> {ZåZ{b{IV h¡…

Liabilities (bm¶{~{bQ>rO) ` Assets (AgoQ²>g) `

Creditors (H«o${S>Q>g©) 1,52,160 Fixed Assets ({’$³ñS> AgoQ²>g) 3,60,000
Capital (H¡${nQ>b) 6,56,000 Current Assets (H$a§Q> AgoQ²>g) 4,88,160
Reserve ([aOd©) 1,60,000 Investments in shares
(eo¶g© ‘| {Zdoe) 1,20,000
9,68,160 9,68,160
The following net profits were earned which included a fixed income on investment of
` 8,000 per year.
{ZåZ{b{IV ZoQ> àm°{’$Q²>g àmá {H$¶m J¶m Wm {Og‘| {Zdoe na < 8,000 H$s {’$³ñS> B§H$‘ gpå‘{bV Wr&