Goodwill is valued at 1.5 years purchased of avg profit of last 3 years,less Rs 12000.
Profits for 3 yrs are 30000,20000 and 10000. Find goodwill?
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Explanation:
Avg Profit: 30000+20000+10000/3
=20000-12000=8000
Goodwill=Avg Profit *Years of Purchase
=8000 * 1.5
=12000
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