Question

Aman purchased bharat business with effect from 1 April 2020 . It was agreed that the firms goodwill will be valued at 2 years purchase of Average normal profit of the last 3 years profit of bharat business for the last 3 years ended 31 march :
2018 - 100000 ( including an abnormal gain of 10000)
2019 - 110000( after charging an abnormal loss of 20000 )
2020 - 85000( including non business income of 5000)


Calculate value of the firm 's goodwill
plz fast​

Answer 1

Explanation:

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Answer 2

Answer:

Average profit = (1,00,000-10,000) + (1,10,000+20,000) + (85,000-5000)

= 90,000 + 1,30,000 + 80,000 = 3,00,000

Average profit= 3,00,000/3

= 1,00,000

Goodwill= 1,00,000 * 2

= 2,00,000