The Balance Sheet of Star Co. Ltd. is as follows:

You are asked to value the goodwill of the company on the basis of 5 years’ purchase of super profits, for which purpose, the following information are supplied :
(i) Rate of income tax is 50%.
(ii) Reasonable return on capital is 12%.

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I. EQUITY AND LIABILITIES (1) Shareholders' Funds: (a) Share Capital --30,000 Equity Shares of * 10 each fully paid (b) Reserves and Surplus-Capital Reserve TOTAL II. ASSETS (1) Non-current Assets: (a) Fixed Assets (2) Share Application Money Pending Allotment: (3) Non-current Liabilities: (4) Current Liabilities: Balance Sheet of Star Ltd. as at 31st March, 2016 (a) Trade Payables -- Sundry Creditors (b) Other Short-term Provisions-Provision for Taxation (i) Tangible Assets Particulars (1) (2) Current Assets: (a) Inventories at Cost (b) Trade Receivables TOTAL Profit and Loss Account-Opening Balance Profit of Current Year Land and Buildings Plant and Machinery (ii) Intangible Assets --- Goodwill at Cost Book Debts Less: Provision for Bad Debts (c) Cash and Cash Equivalents - Cash at Bank 98,000 3,000 Note No. (2) Amount (₹) (3) 3,00,000 20,000 11,000 55,000 1 71,000 55,000 5,12,000 1,75,000 90,000 30,000 1,15,000 95,000 7,000 5,12,000