Question

2. Following information is available about the business of X Ltd.
(i) Profits : In 2013-14 * 40,000; In 2014-15 * 50,000; In 2015-16 * 60,000
(ii) Non-recurring income of 4,000 is included in the profit of 2014-15,
(iii) Profits of 2013-14 have been reduced by * 6,000 because goods were destroyed by fire,
(iv) Goods have not been insured but it is thought to insure them in future. The insurance premium is
estimated at 400 per year,
(v) Reasonable remuneration of the proprietor of business is 6,000 per year, but it has not been taken
into account for calculation of above mentioned profits,
(vi) Profits of 2015-16 include 5,000 income on investment.
Goodwill is agreed to be valued at two year's purchase of the weighted average profits of the past three
years. The appropriate weights to be used are :
2013-14-1; 2014-15-2; 2015-16-3
#solve krke dikhaiye..​

Answer 1

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