Question

Chapter 3 . Goodwill: Nature and Valuation 3.29
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6. s'
19. Suraj and Dilip are partners in a firm dealing in stationery items. The firm is well managed and enjoys the
advantage of being cost effective. It buys stationery items at reasonable cost from Dilip's relative who is a
manufacturer of stationery items. The firm's sale outlet is situated near a school. As a result, the firm has a steady
demand of stationery items and is earning good profits. The firm is donating 10% of its profits to the nearby
school for the education of the students of below poverty line. State any two factors affecting the value of
goodwill of the firm. Also, identify any two values which the firm is trying to propagate. (Delhi 2016
EXERCISE
Average Profit Method
1. Goodwill is to be valued at three years' purchase of four years' average profit. Profits of the firm for las
four years ending 31st March, were:
2017-12,000; 2018—18,000; 2019— 16,000; 2020— 14,000.
Calculate amount of Goodwill.​

Answer 1

Answer:

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