Doubts

SOLUTION A firm which produces goods having a stable demand will be able to earn more profits and hence will have more goodwill.

SOLUTION The monopoly condition or limited competition enables the concern to earn high profits which leads to higher value of goodwill.

SOLUTION Belter quality of product will increase the sales and profits which will increase the value of goodwill.

SOLUTION If the manager is capable and competent, the firm will earn high profits which will increase the value of goodwill.

SOLUTION Better location will attract more customers resulting in increase in sales and profits which in turn will result in increase in the value of goodwill.

SOLUTION Goodwill cannot be seen or touched; it can only be felt. Hence, it is treated as an intangible asset. But it is not a fictitious asset because fictitious assets…

SOLUTION Accumulated profits are credited to the Capital Accounts of all the partners in their old profit-sharing ratio and accumulated losses are debited to their Capital Accounts in old profit-sharing…

SOLUTION In Old Profit-Sharing Ratio.

SOLUTION Goodwill = Super Profit x 100 / Normal Rate of Return