Question

average profit method :-Rana and soun are sharing profit 11:9 ratio
Their good will be valued at two years purchase of average profit of lost three years Profit of
year are ₹70000 ₹30000 ₹50000​

Answer 1

1,00,000

Explanation:

Total profit = 70,000 + 30,000 + 50,000 = 1,50,000

Average profit = total profit / no of years of purchase

= 1,50,000/3

= 50,000

Goodwill = average profit * no of years' valuation

= 50,000*2

= 1,00,000