Question

In
ller
ILLUSTRATION 4.
A and B are partners sharing profits equally. They agree to admit C for equal share.
For this purpose goodwill is to be valued at 150% of the average annual profits of the
last 5 year's profits.
Profits were :
Year ended
31st March 2015
95
ed
ne
40,000
2016
60,000
2017
1,00,000
2018
20,000 (Loss)
2019
1,50,000
It was observed that :
(1) During the year ended 31st March 2016, an asset of the original cost of
32,00,000 with book value of 1,50,000 was sold for 1,24,000.
(2) During the year ended 31st March, 2017, firm's assets were not insured due to
oversight. Insurance premium being 20,000.
(3) On 1st April, 2017,2 Computer's costing 1,00,000 were purchased and were
wrongly debited to Travelling Expenses. Depreciation on Computers was to
be charged @ 20% p.a. on written down value basis.​

Answer 1

Answer:

40000+86000+80000+60000+134000=400000

400000÷ 5= 80000

Goodwill =( 80000×150)÷ 100= 120000

Explanation:

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