Question

32,20,000.
Produd
2
2
20007
33 0
60 como
0.7. The profits earned by a firm during the last four years were as follows:
Year ended 31st March
Profits () wt
2013
80,000 T
2014
1,00,000
2015
1,10,000 3
2016
Calculate the value of goodwill on the basis of three year's purchase of weighted 12,1000
average profits. Weights to be used are 1, 2, 3 and 4 respectively to the profits for 2013, 1210907
2014, 2015 and 2016.
12107 * 3
[Ans. Goodwill 3,63,000.]
363000
Q. 8. Following information is available about the business of a firm:
(i) Profits : In 2013, 340,000; In 2014, 350,000; In 2015, 760,000, (ii) Non-
recurring income of 1,000 is included in the profits of 2014, (iii) Profits of 2013 have
been reduced by 36,000 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 76,000 per year, but it has not been taken into account for calculation of above
mentioned profits, (vi) Profits of 2015 include 35,000 income on investment. - wkode In cove)
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 :- 1; 2014:-2; 2015 :-3.
[Ans. Value of Goodwill 390,200.]
Q. 9. Calculate the value of goodwill on the basis of three year's purchase of the
weighted average profits of the last five years. Profits to be weighted 1, 2, 3, 4 and 5,​

Answer 1

Answer:

Average profit = (Total profit)/(Number of years) = 60,000/3 = Rs. = 20,000 Normal profit = Capital employed x Normal rate of return = 80,000 x 15/100 = 12,000 Super profit = 8,000 Valuation of goodwill = (Super profit) x (No. of years purchase ) = Rs. 8,000 x 2 = Rs. 16,000Read more on Sarthaks.com - https://www.sarthaks.com/893114/partnership-firm-earned-profits-during-last-three-years-follows-2016-000-2017-000-and-2018?show=893122#a893122