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Compute value of goodwill at two years
purchase of average profits of last
4 years. Profits were:
1st year 80,000, 2nd year (Loss)
*20,000. 3rd year 90,000 and 4th year
1,00,000. During 1st year firm suffered
a loss of 15,000 due to an accident
and during 2nd year it earned an
abnormal profit of 25,000.
Firm will retrench a manager to whom
a salary of 1,000 p.m. is paid and in
future firms' assets will be insured at a
premium of 2,000 p.a.
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Answer:Profits for last four years ending on 31st March of the firm were: ... Calculate value of goodwill on the basis of three years' purchase of average profit of the ... The profit for first year was ₹ 1,00,000, profit for the second year was twice the ... (ii) There was an abnormal loss of ₹ 20,000 incurred in the year ended 31st March, ..
Explanation:
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