Question

Goodwill of the firm on the basis of 2 years of purchase of average profit of the last three years is 25000.find average profit​

Answer 1

Answer:

Average profit = 8,333 (Approx)

Explanation:

Given:

Goodwill = 25,000

Method: 2 years of the purchase of the average profit of the last three years

Find:

Average profit

Computation:

Goodwill = 3 × Average profit

25,000 = 3 × Average profit

Average profit = 25,000 / 3

Average profit = 8,333.33

Average profit = 8,333 (Approx)