Question

The profits earned by a firm during the last four years were as follows: 6 Year ended 31st March Profits (`) 2013 80,000 2014 1,00,000 2015 1,10,000 2016 1,50,000 Calculate the value of goodwill on the basis of three year’s purchase of weighted average profits. Weights to be used are 1, 2, 3 and 4 respectively to the profits for 2013, 2014, 2015 and 2016.

Answer 1

Answer:

Atul : Neera

3 : 2

Goodwill = ` 2,00,000

Mitali’s share = 2,00,000 × x = 20,000

x = 1

10

Atul = − = − = 3

5

1

10

6 1

10

5

10

Neera = = 2

5

4

10

Mitali = 1

10

New Ratio = 5 : 4 : 1

2. What is meant by ‘Issued Capital’ ?

OR

What is meant by ‘Employees Stock Option Plan’?

Ans. Issued capital means such capital as the company issues from time to time for subscription –

Section 2(50) of the companies Act 2013.