Question

Accounts-II (Goodwill : Nature
& Weighted Average Profits Method) Calculate the value of goodwill of a firm on the basis of
three year's purchase of the weighted average profit of the last four years. The profits of last four
years were:
2014-15
2015-16
2016-17
2017-18
5.200
* 9.300
10.700
During 2014-15 there was abnormal loss of 1.000 due to theft and in 2017-18 there was a profit
from sale of land amounting to 4,000. In 2015-16 closing stock was over valued by 1.200. The
weights are 1, 2, 3 and 4 for the year 2014-15. 2015-16. 2016-17 and 2017-18 respectively.

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Answer 1

Answer:

Accounts-II (Goodwill : Nature

& Weighted Average Profits Method) Calculate the value of goodwill of a firm on the basis of

three year's purchase of the weighted average profit of the last four years. The profits of last four

years were:

2014-15

2015-16

2016-17

2017-18

5.200

* 9.300

10.700

During 2014-15 there was abnormal loss of 1.000 due to theft and in 2017-18 there was a profit

from sale of land amounting to 4,000. In 2015-16 closing stock was over valued by 1.200. The

weights are 1, 2, 3 and 4 for the year 2014-15. 2015-16. 2016-17 and 2017-18 respectively.

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