Question

three
Year
8. Abhay, Babu and Charu are partners sharing profits and losses equally. They agree to admit Daman for
equal share of profit. For this purpose, the value of goodwill is to be calculated on the basis of four years'
purchase of average profit of last five years. These profits for the year ended 31st March, were:
Calculate the value of goodwill after adjusting the above.
[Ans.: Goodwill
-2,25,000.1
2015
2016
2017
2018
2019
1,50,000
3,50,000
5,00,000
7,10,000
(5,90,000)
On 1st April, 2018, a car costing * 1,00,000 was purchased and debited to Travelling Expenses Account,
on which depreciation is to be charged @ 25%. Interest of * 10,000 on Non-trade Investments is credit
to Income for the year ended 31st March, 2018 and 2019.
[Ans.: Goodwill-9,40,000.)
Profit/(Loss) (3)​

Answer 1

Answer:

Abhay, Babu and Charu are partners sharing profits and losses equally. They agree to admit Daman for equal share of profit. For this purpose, the value of goodwill is to be calculated on the basis of four years purchase of average profit of last five years.

Answer 2

Answer:

940000 is the value of goodwill

Explanation:

1. adjustments : it is given that a car is purchased so add back that value to the next year {add in 2020 column} then ,  less the depreciating value 25%{25000} in the same year. less the non trade investment income {interest} 10000 in both the years {2019 n 2020}

2. now after adjusting the profits , calculate the avreage profit , you will get 235000

3. now multiply that with the purchase year given {4}

23500*4= 940000

HOPE IT HELPS !!!