Question

The profits of a business for last 5 years
are 12000 , 13000, 14000,18000&
2000 loss. Based on 2 years purchase of
last 5 years profits, value of goodwill will be

Answer 1

Answer:

16000

Explanation:

18000-2000=14000

Answer 2

Explanation:

First we find average profit= 12000+13000+14000+18000+(2000)/5

55000/5

11000

Now we find goodwill

formula of goodwill is- average profit×no.of purchase year

11000×5

=55000

so,goodwill is 55000

Hope it will be help you