profits : in 2013 , 40000 ; in 2014 , 50000 ; in 2015 , 60000 , (1 ) non - recurring income of 1000 is included in the profits of 2014 , (2) profits of 2013 have Been reduced by 6000 because goods were destroyed by fire , ( 3) goods have not been insured but itis thought to insure them in future . the insurance premiums is estimated at 400 per year , but it has not been taken into account for calculation of above mentioned profits , ( 4) profits of 2015 include 5000 income on investment .
Answers
Answer:
Explanation:
CALCULATION OF ADJUSTED PROFIT
Particulars 2013 2014 2015
Profits 40000 50000 60000
Less : non incuring inc (1000)
add: 6000
Less : insurance (400) (400) (400)
Less : remuneration (6000) (6000) (6000)
Less : Income from inv (5000)
ADJUSTED PROFIT 39600 42600 48600
CALCULATION WEIGHTED AVERAGE
YEAR PROFIT (Rs) WEIGHT PRODUCT
2013 39600 1 39600
2014 42600 2 85200
2015 48600 3 145800
6 270600
Weighted average profit = 270600 / 6 = Rs.45100
Goodwill at 2 years purchase = 45100 * 2 = Rs. 90200