Question

Abhay Babu and Charu are partners sharing profit and losses equally they agree to admit Daman for the equal share of profit for this purpose the value of goodwill is to be calculated on the basis of 4 years purchase of average profit of last 5 years this profit for the year ended 31st March 1 year 2016 :150000 ,2017: 350000 ,2018 :500000, 2019: 710000 ,2020 :( 590000) on 1st April 2019 ka costing 100000 was purchased and debited to travelling expenses account on which depreciation is to be charged @ 25% per annum interest of 10000 on non trade investment is credit to income for the year ended 31st March 2019 and 2020 calculate the value of good will after adjusting the above​

Answer 1

Answer: first calculate the normal profit and add the normal profit than find the average profit and calculate value of goodwill

Explanation: please check 2nd picture because in 1st one i counted loss as a profit... So the answer is 9,40,000