Sunny and Rohan were partners in a firm sharing profits and losses in the ratio of 2: 1. Their books showed that the capital employed on 31st March, 2023 was Rs. 7,00,000. The average profits earned by the firm were Rs. 90,000. Calculate the value of goodwill on the basis of 5 years purchase of super profits assuming that the normal rate of return is 10%.

Marks-3, CBSE: 2023-24/Zone-5/Set-1/Q-20