2. Calculate the Value of Goodwill at two and a half year's purchase of the average profit of last 5 years
The firm earned profit during the first three years as * 30,000, 28,000 and 22,000 and suffered losses
of 12,000 and 8,000 during the last two years.
nt three years' nurchase of the average of the last three years' profit.
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Average profits of 5 year= 20000 + 18000 +2000 +5000 +5000/5
= 10000
Calculation of Goodwill = 10000* 1.5
= 15000
Like this u can try to find out the answer
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