From the following particulars relating to the business of Georg. Compute the value of goodwill on the basis of three years purchase of super profit taking average of last four. Fixed assets 800,000 Current assets 80,000 Current liabilities 160,000 Normal rate of return 15% Managerial remuneration if employed elsewhere $10,000 per annum. Profits of the last four years were $120,000, 130,000, 140,000 and 150,000 respectively.

From the following particulars relating to the business of Georg. Compute the value of goodwill on the basis of three years purchase of super profit taking average of last four. Fixed assets 800,000 Current assets 80,000 Current liabilities 160,000 Normal rate of return 15% Managerial remuneration if employed elsewhere $10,000 per annum. Profits of the last four years were $120,000, 130,000, 140,000 and 150,000 respectively.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter4: The Balance Sheet And The Statement Of Shareholders' Equity

Section: Chapter Questions

Problem 7RE

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