Question

9. Avijit purchases the business of Subhojit on 1st January, 2020. profits of past 3 years are : 2017 : 390,000 (including 14,000 profit from sale of plant) 2018 : 1,00,000 (including theft of goods worth * 16,000 during tl 2019: 1,06,000 (does not include 10,000 as insurance premium Calculate the Value of Goodwill of the firm based on 2 years 3 years. bed nocote of 100.000 excluding sto​

Answer 1

Answer:

As you know Goodwill is given when made purchase a business

Here Avijit bought business from Subhojit

So, as per simple average method for Valuation of Goodwill

= Average Profit * no. of years purchase

Calculate avg. Profit of last 3 years=

Sum of profits of year 2014,2015,2016/no. of years.