Question

Annu, Baby and Chetan are partners in a firm sharing profits and losses equally. They decide to take Deep
nito partnership from 1st April, 2019 for 1/5th share in the future profits. For this purpose, goodwill is to
be valued at 100% of the average annual profits of the previous three or four years, whichever is higher.
The annual profits for the purpose of goodwill for the past four years were:
Year Ended
Profit
31st March, 2019
2,88.000;
31st March, 2018
1,81,800
31st March, 2017
1,87,200
31st March, 2016
Calculate the value of goodwill.
2,53,200
(Ans.: Goodwill-
2.27,550.)
kerage Protit Met
W
rotit Method whe paet Adimetments are Made
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Answer 1

hope it helps..........

Answer 2

Explanation:

Rs.2,27,550

Avg profit of last 3 years =2,19,000

Avg profit of last 4 years. =2,27,550

Thank u