Question

X and Y are partners sharing profits and losses in the ratio of 3 : 2. They agree to take into
partnership for Z 1/3rd share. For this purpose, goodwill is to be valued at two years purchase of
the average profit of last 4 years which were as follows:
Year ended on 31st March, 2016
1.50,000 Profit
Year ending on 31st March, 2017
1,20.000 Profit
Year ending on 31st March, 2018
1.80.000 Profit
Year ending on 31st March, 2019
1.70.000 Loss
On 1st April, 2018 a Motor bike costing 50,000 was purchased and debited to travelling
expenses account, on which depreciation is to be charged @ 20% p.a. Calculate the value of
goodwill.​

Answer 1

Answer:

and Y are partners sharing profits and losses in the ratio of 3 : 2. They agree to take into

partnership for Z 1/3rd share. For this purpose, goodwill is to be valued at two years purchase of

the average profit of last 4 years which were as follows:

Year ended on 31st March, 2016

1.50,000 Profit

Year ending on 31st March, 2017

1,20.000 Profit

Year ending on 31st March, 2018

1.80.000 Profit

Year ending on 31st March, 2019

1.70.000 Loss

On 1st April, 2018 a Motor bike costing 50,000 was purchased and debited to travelling

expenses account, on which depreciation is to be charged @ 20% p.a. Calculate the value of

goodwill.

Answer 2

Answer:

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