x and y are partners sharing profit and losses in the ratio 3 : 2 they admit that for 1/5th share for this purpose the Goodwill of the firm is to be valued on the basis of three years purchase of last 5 years average profit the profits were:
2013 -14 - 50000
2014-15 - 60000
2015 -16- 40000
2017-18 - 80000
The profit of 2016 to 17 was calculated after charging 5000 for loss of good bye fire calculate the Goodwill of the firm.
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Answer:
Calculate the value of Goodwill as on 1st April, 2018 on the basis of
three years' purchase of the average profits of the last five years.
The profits and losses for the years were: 2013-14-(Loss) 80,000
(including Profit on sale or furniture during the year " 4,000),
2014-15 - 1,84,000,
2014-16- 100 000
(profit on sale of machinery
during the year 10.000)
2016-17- 1,50,000
2017-18 - 1,80,000
(including loss on sale of computer 10,000).
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