X and Y are partners sharing profits and losses in the ratio of 4:3. They agree to admit Z as a partner for 1/5th share. For this purpose, the goodwill of the firm is to be calculated on the basis of 3 years' purchase of last 4 years average profits. The profits for the last four years were:
Years
2015
2016
2017
2018
Profits (3)
70,000 (after allowing interest on investment of 5,000)
25,000 (after charging loss of * 6,995 on sale of plant)
61,000
45,000
The following additional information is provided:
(i) On 01.07.2016, the firm had purchased a computer for 30,000 and it was debited to stationery expenses. Depreciation is to be charged on computer @ 10% p.a. on the Diminishing Balance Method.
(ii) The closing stocks of 2016 and 2017 were overvalued by 3,000 and 2,000 respectively. (iii) To cover the operating cost, an annual charge of 4,500 should be made for the purpose of goodwill valuation.
Calculate goodwill of the firm.
Answers
Answered by
16
Answer:
2015. 2016. 2017. 2018
70000. 25000. 61000. 45000
-(5000). +6995
+ 30000
- (2250). - (2775)
-(3000). ,-(2000)
+3000. +2000
-(4500). -(4500). -(4500). -(4500)
= 60500. 24495. 85250. 39725
Average profit =60500+24495+85250+39725/4
= 209970/4
=52492.5
Goodwill = 52492.5 × 3
= 157477.5
.
Explanation:
pls mark this answer as brainliest
Similar questions