Math Problem Solver

On 31 March 2020, the balance sheet of JPC Ltd. was as follows:

Liabilities Amount Assets Amount

Share Capital: 10% Preference Shares (1,000) of Rs. 100

Each Fully Paid

Goodwill 50,000

100,000 Land & Buildings 200,000

50,000 Equity Shares of Rs. 10 Each Fully

Paid 500,000 Machinery 250,000

General Reserve 100,000 Furniture 20,000

Capital Reserve 20,000 Investment in 5% Govt. Securities at Cost

(Face Value of Rs. 60,000) 75,000

P&L A/c 80,000 Stock 400,000

6% Debentures 160,000 Book Debts 80,000

Sundry Creditors 100,000 Cash at Bank 25,000

Provision for Taxation 40,000

1,100,000 1,100,000

The assets were revalued as follows:

Land & Building 280,000

Machinery 220,000

Furniture 30,000

The normal return on capital employed for valuation of goodwill is 10%, the basis of valuation being 4 years’ purchase of super profits.

50% of investment in building is treated as non-trading asset because a sum of Rs. 12,000 is collected annually as rent from building.

the average annual profit after tax at 50% is Rs. 1,32,500

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For Computation of value of goodwill, what is the value of 'total capital employed' as per provided information?

Question 1Answer

a.

445,000

b.

595,000

c.

600,000

d.

515,000

Question 2

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What is the value of goodwill?

Question 2Answer

a.

170,000

b.

165,000

c.

150,000

d.

196,500

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As per the provided information of JPC ltd. What is the super profit?

Question 3Answer

a.

65,500

b.

50,000

c.

125,000

d.

132,500

Question 4

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What is the Intrinsic Value of Each Equity Share?

Question 4Answer

a.

18.13

b.

15.1

c.

17

d.

12.75

Question 5

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For Valuation of Share, What is the value of Net Assets Available?

Question 5Answer

a.

1,000,000

b.

906,500

c.

850,000

d.

700,000