CBSE Class 12 Accountancy — Accounting for Partnership Firms: Fundamentals (Goodwill — Nature and Valuation)

Average profit of a firm during the last few years is Rs. 8,00,000. In similar business, the normal rate of return is 10% of the capital employed. Assets of the business were Rs. 60,00,000 and its external liabilities were Rs. 20,00,000. Calculate the value of goodwill by : (i) Capitalisation of super profits method (ii) Super profit method if the goodwill is valued at four years' purchase of super profits.