Question

Calculate the value of goodwill.
13. Geet and Meet are partners in a firm. They admit Jeet into partnership for jsnehbehebbebeheheequal share. It was agreed that
goodwill will be valued at three years' purchase of average profit of last five years. Profits for the last five
be insure
years were:
Damano
four year.
e:
2020
Year Ended 31st March, 2016 31st March, 2017 31st March, 2018 31st March, 2019 31st March, 2020
Profits )
90,000 (Loss) 1,60,000
1,50,000
65,000
1,77,000
Books of Account of the firm revealed that:
0 The firm had gain (profit) of 50,000 from sale of machinery sold in the year ended 31st March,
2017. The gain (profit) was credited in Profit and Loss Account.
(i) There was an abnormal loss of 20,000 incurred in the year ended 31st March, 2018 because of a
machine becoming obsolete in accident.
(iii) Overhauling cost of second hand machinery purchased on 1st July, 2018 amounting to
1,00,000 was debited to Repairs Account. Depreciation is charged @ 20% p.a. on Written Down
Value Method.
Calculate the value of goodwill.
90,000
ccount,
s is credit
a parte
Weighted Average Profit Method
for the year ended 31st March for the last five years were:
O

Answer 1

Answer:

They admit Jeet into partnership for jsnehbehebbebeheheequal share. ... goodwill will be valued at three years' purchase of average profit of last five years. Profits for the last five be insure