Question
What is super profit?
Super profit = Average profit – Normal profit
Average profit is calculated by dividing the total of adjusted actual profit of a certain number of years by the total number of such years.
Normal profit is the profit earned by similar business firms under normal conditions.
Normal profit = Capital employed × Normal rate of return
Capital employed = Fixed assets + Current assets – Current liabilities
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| Particulars | ₹ | Particulars | ₹ |
| Sports equipment | 30,000 | Prize fund | 10,000 |
| Computer | 25,000 | Prize fund investments | 10,000 |
| Subscription outstanding for 2018-19 | 5,000 | Cash in hand | 7,000 |
| Subscription received in advance for 2019-20 | 8,000 | Cash at bank | 21,000 |
| Particulars | $₹$ |
| Tournament fund on $1^{st}$ April $2018$ | $90,000$ |
| Tournament fund investment on $1^{st}$ April $2018$ | $90,000$ |
| Interest received on tournament fund investment | $9,000$ |
| Donation to tournament fund | $10,000$ |
| Tournament expenses | $60,000$ |
| Balance Sheet of Sundaram Ltd. as on 31.03.2019 | |
| Particulars | Amount ₹ |
| I EQUITY AND LIABILITIES | |
| 1. Shareholders’ Fund | |
| a) Share capital | |
| (i) Equity share capital | 2,50,000 |
| (ii) Preference share capital | 1,50,000 |
| (b) Reserves and surplus | 50,000 |
| 2. Non – Current Liabilities | |
| Long term borrowings | |
| 3. Current liabilities | |
| Trade Payable | 1,50,000 |
| Total | 6,00,000 |
| II ASSETS | |
| 1. Non-Current assets | |
| (a) Fixed Assets | 4,60,000 |
| (b) Non-Current investments | 1 ,00,000 |
| 2. Current assets | |
| Cash and cash equivalents | 40,000 |
| Total | 6,00,000 |
| Particulars | ₹ |
| Closing capital as on 31.3.2018 | 80,000 |
| Additional capital introduced during the year | 30,000 |
| Drawings during the year | 15,000 |
| Opening capital on 01.4.2017 | ? |
| Loss for the year ending 31.3.2018 | 25,000 |