Question

From the following information of megh and nad' s firm , compute the value of Goodwill on the basis of 2 years purchase of last 4 years average profit
year : 2014- 15 2015-16 2016-17 2017-18
profit : 1,80,000 2,10,000 1,90,000 2,20,00
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Answer 1

Answer:

Explanation:

Average Profit =

$\frac{1,80,000 \: + \: 2,10,000 \: + \: 1,90,000 \: + 2,20,00}{4}$

Average Profit = Rs. 1,50,500

Goodwill = Average Profit × no. of year purchased

= 1,50,500 × 2

= 3,01,000

Goodwill = Rs. 3,01,000

Hence, Goodwill = Rs. 3,01,000