Compute the amount of goodwill based on 3 years' purchase of super profit from the following: Future maintainable profit after tax : ₹15,00,000 Normal pre-tax rate of return : 20% Capital employed : ₹60,00,000 Tax rate :

Calculation of Goodwill Profit after tax = ₹15,00,000 Normal Profit = (Capital employed x pre tax return) - (tax rate) = (60,00,000 x 20/100) - (30/100) = ₹8,40,000 Super Profit = Actual Profit - Normal Profit = ₹6,60,000 Goodwill = No. of years of purchase x Super Profits = 3 x 6,60,000 = ₹19.8 lacs