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25. Compute the value of Goodwill of a firm on the basis of 2 years purchase of the weighted average profits of last 4 years.The profits of last 4 years were : 2016 28,000, 2017 * 34,000 ; 2018 ? 32,000; 2019 45,000. The weightsassigned were 1, 2, 3 and 4.Following informaiton is supplied to you:(1) In 2018, a major repair was made in plant and machinery incurring 18,000 on 1st July which wascharged to revenue. The said sum is agreed to be capitalised for goodwill computation subject todepreciation @ 10% per annum on reducing balance method.(ii) The closing stock of 2017 was overvalued by 4,000.26. Mr. Santharam proposes to purchase the business carried on by Mr Somnrakash Goodwill in ulud |
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Answer» 25. COMPUTE the VALUE of Goodwill of a firm on the basis of 2 years purchase of the weighted averageprofits of last 4 years.The profits of last 4 years were : 2016 28,000, 2017 * 34,000 ; 2018 ? 32,000; 2019 45,000. The weightsassigned were 1, 2, 3 and 4.Following informaiton is supplied to you:(1) In 2018, a major repair was made in plant and machinery incurring 18,000 on 1st July which wascharged to revenue. The said sum is agreed to be capitalised for goodwill computation subject todepreciation @ 10% per annum on REDUCING balance method.(II) The closing STOCK of 2017 was overvalued by 4,000.26. Mr. Santharam proposes to purchase the business carried on by Mr Somnrakash Goodwill in ulud |
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