Question

compute the value of goodwill of a firm on the basis of 3 years purchase of last 4 years average profit .the profit of the last 4 years 36000, 54000, 44000, and 65000. the profit of first year includes the theft of goods 4000 , profit of 2nd year includes abnormal gain of 2,000 while profit of 4th year includes speclative profit of 5,000 .​

Answer 1

Answer:

147000

Explanation:

profit     adjustments  adjusted profits

36000    +4000          40000

54000     (2000)         52000

44000                          44000

65000    (5000)          60000

                total              196000

average profit = total product

                          no. of years

                        = 196000

                               4

                         = 49000

goodwill = average profit X no. of years of purchase

               = 49000 X 3

                = 147000