The Balance sheet of Alex company limited as on 31.3.2001 is as under.LiabilitiesAmount ($)AssetsAmount ($)3,000 Pref. shares of 1003,00,000Fixed Assets5,00,0005,000 equity shares of 100G/RP/L A/c5,00,000Stock175,00040,000Debtors2,25,0001,00,00080,000BankCreditors80,000Total10,00,000Total10,00,000 The profits of the company (before providing for tax 40%) and the rate of dividend declared inrespect of the past 5 financial years are as underYearProfitsRate of Dividend2006-071,35,0008%2007-081,55,00010%2008-0912%1,70,0001,65,0001,80,0002009-1015%2010-1115%You are required to find out the value of goodwill of the company on basis of:a) 5 years purchase of super profitsb) Capitalization of super profits methodc) As per annuity of super profits, taking the PV of annuity of $ 1.00 for 5 years at 10% as$3.78%

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The Balance sheet of Alex company limited as on 31.3.2001 is as under. Amount ($) 3,00,000 5,00,000 40,000 80,000 Amount ($) Liabilities 3,000 Pref. shares of 100 5,000 equity shares of 100 G/R P/LA/c Assets Fixed Assets 5,00,000 175,000 2,25,000 1,00,000 Stock Debtors Bank Creditors 80,000 10,00,000 Total Total 10,00,000

The Balance sheet of Alex company limited as on 31.3.2001 is as under. Amount ($) 3,00,000 5,00,000 40,000 80,000 Amount ($) Liabilities 3,000 Pref. shares of 100 5,000 equity shares of 100 G/R P/LA/c Assets Fixed Assets 5,00,000 175,000 2,25,000 1,00,000 Stock Debtors Bank Creditors 80,000 10,00,000 Total Total 10,00,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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