Question

The profit for the last five years of a partnership firm are as follows:
Year 2014 - * 4.00.000
Year 2015 - 3,98,000
Year 2016 4.50,000
Year 2017 4.45,000
year 2018 - 5,00,000
Calculate goodwill of the form on the basis of 3 years purchase of 5 years' average profits.​

Answer 1

The profit for the five years ending on 31st March, are as follows: Year 2014 Rs. 4,00,000; Year 2015 Rs. 3,98,000; Year 2016 Rs. 4,50,000; Year 2017 Rs. 4,45,000; Year 2018 Rs. 5,00,000. Calculate goodwill of the firm on the basis of 4 years purchase of 5 years average profit.

Answer 2

Answer:

Goodwill = Rs. 13,15,800

Explanation:

Avg profits = Total Trade profits / No.of years profits

= 400000+398000+450000+445000+500000/5

= 2193000/5

= Rs. 4,38,600

Goodwill = Avg profits x No of years Purchase

= 4,38,600 x 3

= Rs. 13,15,800