Raj purchase Rakesh business on 1st April 2020. Profit shown by Raj business for the last three year ended 31st March were: 2018 Rs. 1,00,000 (including an abnormal gain of Rs.12,500). 2019 Rs.1,25,000 ( after charging and abnormal loss of Rs.25,000). 2020 Rs.1,12,500 (excluding Rs.12,500 as insurance premium on firm’s property now to be insured) calculate the value of firm’s goodwill on the basis of 2 year’s purchase of the average profit of the last three years.
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question ; purchase Rakesh business on 1st April 2020. Profit shown by Raj business for the last three year ended 31st March were: 2018 Rs. 1,00,000 (including an abnormal gain of Rs.12,500). 2019 Rs.1,25,000 ( after charging and abnormal loss of Rs.25,000). 2020 Rs.1,12,500 (excluding Rs.12,500 as insurance premium on firm’s property now to be insured) calculate the value of firm’s goodwill on the basis of 2 year’s purchase of the average profit of the last three years.
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