Question

FY. 2015. 2016. 2017. 2018.
PROFITS 1,00,000 1,50,000 2,00,000 4,00,000
closing stock in year 2017 was under valued by 50,000 calculate goodwill 2 years of purchase using weightage average method.​

Answer 1

Explanation:

Year 2014–₹ 4,00,000 Year 2015–₹ 3,98,000; Year 2016–₹ 4,50,000; Year 2017–₹ 4,45,000; Year 2018–₹ 5,00,000. Calculate goodwill of the firm on the basis of 4 years' purchase of 5 years' average profit.