Question

Q1.
Kaku purchased Polu's business on 1st April, 2018. The profits for the last five years are:
31st March, 2014 - 37.000
31st March, 2015 — 347,000 (after charging an abnormal loss of theft of 34,000)
31st March, 2016 — *53,000 (including an abnormal gain of 35,000)
31st March, 2017 — 360,000 (including a profit of lottery 6,000)
31st March, 2018 — 370,000 (after charging 10,000 a loss of furniture destroyed by fire)
Calculate the value of goodwill on the basis of two years' purchase of the average profit of the
last five years.​

Answer 1

Answer:

Average Profit Method when Adjustments are Made). Aman purchased Bharatendu's business with effect from 1st April, 2019. It was agreed that the firm's ...