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Q. 6. 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,
the greatest weightage to be given to last year. Profits of the last five years were :
Year ended
31st March, 2015: Profit
80,000
2016: Profit 1,05,000 (after considering abnormal loss
of 41,500)
2017 : Loss 20,000 (after considering abnormal gain
of 40,000)
2018: Profit 1,80,000
2019: Profit 2,00,000
Books of Accounts of the firm revealed that:
(1) Closing Stock as on 31st March, 2015 was overvalued by 540,000. less
adj Repairs to Machinery 360,000 were wrongly debited to Machinery Account
on 1st July, 2017. Depreciation was charged on Machinery @ 20% p.a. on
diminishing balance method.
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Answer 1

Answer:

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