a and b are partners in a firm. They admit c into the firm. The goodwill for the purpose is to be calculated at 80% of the average normal profits of the last three years which were rs.1,00,000 ,rs.1,50,000 and rs.3,00,000 respectively. Second year profit included profit on sale of machinery rs.1,00,000. Find out the value of goodwill of the firm on c's admission.
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Answer:
normal profit - second year profit 150000-100000
50000
100000+50000+300000
-450000/3
150000its average profit and goodwill is 80%of average profit 150000*80%
Explanation:
120000its goodwill of the firm
than firm goodwill distribute in partner with respect sharing ratio
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