Akash and Mita were partners in a firm sharing profits and losses in the ratio of $\displaystyle 5$ : 3. Their capitals were ₹ $\displaystyle 9,00,000$ and ₹ $\displaystyle 6,00,000$ respectively. The normal rate of return was $\displaystyle 15$%. The profits of the last four years were : ( ) $\displaystyle 2021$ - $\displaystyle 22$ $\displaystyle 5,50,000$ $\displaystyle 2022$ - $\displaystyle 23$ $\displaystyle 5,00,000$ $\displaystyle 2023$ - $\displaystyle 24$ ($\displaystyle 1,50,000$) $\displaystyle 2024$ - $\displaystyle 25$ $\displaystyle 6,50,000$ The closing stock for the year $\displaystyle 2024$ - $\displaystyle 25$ was undervalued by ₹ $\displaystyle 50$,000. Goodwill is to be valued at two years' purchase of last four years' average super profits. Calculate the value of goodwill of the firm.

=  Goodwill Super Profit Number of years’ purchase = − Super Profit Average Profit Normal Profit Corrected Profit of $\displaystyle 2024$-$\displaystyle 25$ after adjustment of undervaluation of closing stock = $\displaystyle 6,50,000$ + $\displaystyle 50,000$ = `$\displaystyle 7,00,000$ Average Profit = $\displaystyle 5,50,000$ + $\displaystyle 5,00,000$ + ($\displaystyle 1,50,000$) + $\displaystyle 7,00,000$ $\displaystyle 4$ = $\displaystyle 16,00,000$ $\displaystyle 4$ = `$\displaystyle 4,00,000$ $\displaystyle 67$/$\displaystyle 3$/$\displaystyle 2$ Page $\displaystyle 7$ of $\displaystyle 20$ CBSE $\displaystyle 2026$ Accountancy ($\displaystyle 055$) Capital Employed = $\displaystyle 9,00,000$ + $\displaystyle 6,00,000$ = `$\displaystyle 15,00,000$ = Normal Profit Normal Rate of Return x Capital Employed $\displaystyle 100$ =  $\displaystyle 15$/$\displaystyle 100$ $\displaystyle 15,00,000$ = `$\displaystyle 2,25,000$ ($\displaystyle 1$/$\displaystyle 2$) = − Super Profit $\displaystyle 4,00,000$ $\displaystyle 2,25,000$ = `$\displaystyle 1,75,000$ =  Goodwill $\displaystyle 1,75,000$ $\displaystyle 2$ = `$\displaystyle 3,50,000$