Q. X. Following information is available about the business of a fimm
i Profits in 2013 40.000. In 2014, USC,000. In 2015, 160,000, (I) Non-
income of P1.000 is included in the protest of 2014) Profits of 2013 have been
by 16000 because goods were destroyed by for Goods have not been insured but it is
thought to insure them in future the sumune premium is estimated at 400
year, (v) Reasonable remuneration of the presence of business is 26,000 per year, but it
has not been taken into mount for cabulation of above mentioned profits, (vi) Profits of
2015 include New
Goodwill is agreed to be valued
wann purchase of the weighted average profits
of the past three years. The main te borbenewed are
Answers
Answer:
Following information is available about the business of a firm: <br> (i) Profits : In 2013, Rs. 40,000, In 2014, Rs. 50,000, In 2015, Rs. 60,000, (ii) Non-recurring income of Rs. 1,000 is included in the profifts of 2014, (iii) Profits of 2013 have been reduced by Rs. 6,000 because goods were destroyed by fire, (iv) Goods have not been insured but it is thought to insure them in future. The insurance premium is estimated at Rs. 400 per year, (v) Reasonable remuneration of the proprietor of business is Rs. 6,000 per year, but it has not been taken into account for calculation of above mentioned profits, (vi) Profits of 2015 include Rs. 5,000 income on investment. <br> Goodwill is agreed to be valued at two year's purchase of the weighted average profit of the past three years. The appropriate weights to be used are :- <br> 2013 :- 1, 2014 :- 2, 2015 :- 3.