Question

Goodwill is to be valued at three years purchase of your years average profit . profit for last four years ending on 31st March of the were . 2015 rs 12,000. 2016 rs 18,000. 2017 16,000 . 2018 rs 14,000. . calculate amount Goodwill​

Answer 1

Answer:

Goodwill is to be valued at three years purchase of your years average profit . profit for last four years ending on 31st March of the were . 2015 rs 12,000. 2016 rs 18,000. 2017 16,000 . 2018 rs 14,000. . calculate amount Goodwill

Answer 2

Answer:

Answer:

The amount of Goodwill = 45,000

Explanation:

Given :

• The Goodwill of firms should be valued on the basis of 3 year purchase

• 4 years average profit

To find :

• Calculate the amount of Goodwill

Solution :

Goodwill = Average Profit × Number of year's Purchases

Average profit =

$sf{\longrightarrow{\dfrac{Total \: Profit \: for \: past \: given \: years}{Number \: of \: years}}}⟶$

Numberofyears

TotalProfitforpastgivenyears

$\sf{\longrightarrow{\dfrac{12,000 \: + \: 18,000\: + \: 16,000 \: + 14,000}{4}}}⟶$

4

12,000+18,000+16,000+14,000

\sf{\longrightarrow{\dfrac{60,000}{4} = 15,000}}⟶

4

$\sf{\longrightarrow{\dfrac{60,000}{4} = 15,000}}⟶ </p><p>4$

60,000

=15,000

Goodwill = Average Profit × Number of year's Purchases

Number of years Purchases = 3 years

Goodwill = 15,000 × 3

$\longrightarrow \: 45,000⟶45,000$

Therefore,

The amount of Goodwill = 45,000