Valuation of goodwill

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WHY IS DIVIDEND ADDED IN CLOSING CAPITAL EMPLOYED WHILE CALCULATION OF AVERAGE CAPITAL EMPLOYED IN VALUATION OF GOODWILL ?

Replies (3)

Dear Ashay,

Refer followinf link :

Read Point no.: 2. of refd link.

https://www.scribd.com/doc/28841904/Valuation-of-Goodwill

Dividend is an appropriation of profit which in turn is a part of capital.

Profit / Loss is nothing but 'changes in capital' after adjusting drawings and additions.

Is divided or proposed dividend is fully added bak to closing capital or like drawings n profits half(1/2) of it is added bak? Plz reply to my query..


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