Question

Ans. 71,60,000.)
4. X purchased the business of y from 1st April, 2019. For this purpose
all is to be valued at 100% of the average annual profits of the last four years.
shown by Y's business for the last four years were :
goodwill is
The profits shown
Year ended
31st March, 2017
March, 2016 Profit 1,00,000 (after debiting loss of stock by fire
50,000) +
,, 2017 Loss 1,50,000, (includes voluntary retirement
compensation paid 780,000)
2018 Profit 1,50,000
2019 Profit 2,00,000
Verification of books of accounts revealed the following:
(1) During the year ended 31st March, 2017, a machine got destroyed in acciden
and 360,000 was written off as loss in Profit & Loss Account.
(i) On 1st July 2017, Two Computers costing 340,000 each were purchased an
were debited to Travelling Expenses Account on which depreciation is to
charged @ 10%'p.a. on Straight Line Method.
Calculate the value of goodwill.​

Answer 1

Answer:

Identify the 'Accounting Concepts' involved in the following:

a) Production Manager of the company is interested to reflect the good industrial relations in the

accounts.

b) Machine is recorded at cost (Rs. 50,000) while the market value is Rs. 45,000.

c) Accounts are prepared at the end of every year.

d) Same accounting methods are used year after year.