X purchased the business of Y from 1st April,2019. For this purpose goodwill is to valued at 100% of the average profits of the last four years. The profits shown by Y's business for the last four years were:
Year ended:
31st Mar,2016-Profit-₹100000(after debiting loss of stock by fire ₹50000)
31st Mar,2017-Loss-₹150000(includes voluntary retirement compensation paid ₹80000)
31st Mar,2018-Profit-₹150000
31st Mar,2019-Profit-₹200000
Verification of books of accounts revealed:
(1.) During the year ended 31st Mar,2017 a machine got destroyed in accident and ₹60000 was written off as loss in Profit&Loss Account
(2.)On 1st July,2017, two computers costing ₹40000 each were purchased and were debited to Travelling Expenses Account on which depreciation is to be charged @10% p.a. on Straight Line Method.
Calculate the value of Goodwill.
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