Question

Abhay babu and charu are partners sharing profit and losses equally they agree to admit daman for equal share of profits for this the value of goodwill is to be calculated on the basis of 4 years purchase of average profits of last five years these for the year ended 31 March were...

2015 - 150000
2016-350000
2017- 500000
2018-710000
2019-(590000)
On 1 April a car costing 100000was purchase and debited to travelling expenses account on which depreciation is to be charged @25%imtrest of 10000on non trade investment is credited to income for the year ended 31march 2018-19...
Calculate the value of goodwill adjusting above
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Answer 1

Explanation:

accounting equation in the books of Ramesh started business with cash rupees 250000/purchased goods on credit Rs. 10000/sold goods costing Rs .5000 for Rs .7000 /purchased goods for cash Rs .4000 /rent paid Rs . 500 and rent outstanding Rs . 400/sold goods on credit rupees 12000 costing Rs . 14000 / paid salary in advance 1000 / received interest Rs . 200