Aayush and Aarushi are partners sharing profits and losses in the ratio of $\displaystyle 3$ : 2. They admitted Naveen into partnership for $\displaystyle 1$/4th share. Goodwill of the firm was to be valued at three years' purchase of super profits. Average net profit of the firm was ₹ $\displaystyle 20$,000. Capital investment in the business was ₹ $\displaystyle 50,000$ and Normal Rate of Return was $\displaystyle 10$%. Calculate the amount of Goodwill premium brought by Naveen.

Average Net Profit = `$\displaystyle 20,000$ Normal Profit = Normal Rate of Return x Capital Employed Normal Profit = $\displaystyle 10$ x $\displaystyle 50,000$ = `$\displaystyle 5,000$ …………………………………………. ($\displaystyle 1$/$\displaystyle 2$) $\displaystyle 100$ Super Profit = Average Net Profit – Normal Profit = $\displaystyle 20,000$ – $\displaystyle 5,000$ = `$\displaystyle 15,000$ …………………………………………………………………………. ($\displaystyle 1$/$\displaystyle 2$) Goodwill of the firm = Super Profit x Number of Years’ Purchase …………….($\displaystyle 1$/$\displaystyle 2$) = $\displaystyle 15,000$ x $\displaystyle 3$ = `$\displaystyle 45,000$ ……………………………………………………………… ($\displaystyle 1$/$\displaystyle 2$) `$\displaystyle 11,250$ Goodwill Premium brought by Naveen = $\displaystyle 1$ x $\displaystyle 45,000$ = …………… ($\displaystyle 1$) $\displaystyle 4$