Question

Ram and Mohan were partners sharing profits and losses in the ratio of 2:1. They admitted Shyam
partner for 15th share in the profits. For this purpose the Goodwill of the firm was to be valued on te
basis of three years purchase of last five years average profit. The profits for the last five years ended
31st March, were
9540
Year
2019
2020
2016
2018
2017
1.00000
125.000
1.87.500
(62,500)
1.25.000​

Answer 1

Answer:

Explanation: Calculation of amount of goodwill:

Average profit= [100000+125000+187500+(-62500)+ 125000]/5

                      = 95000

Goodwill of the firm= 95000 * 3

                                = 285000

Shyam's share of goodwill= 1/5 * 285000

                                       = 57000

(a) Goodwill appears in the books at 9540

Since the difference between goodwill that already appears in the books and goodwill calculated is zero, no entry is passed.  

(b) Goodwill appears in the books at 9540

Difference= 57000- 9540

                = 47460

           

( considering    62500 as a loss , but its not clear . you have mentioned profit only  and     9540 as goodwill )