Ans. 71,60,000.)4. X purchased the business of y from 1st April, 2019.

1.	Ans. 71,60,000.)4. X purchased the business of y from 1st April, 2019. For this purposeall is to be valued at 100% of the average annual profits of the last four years.shown by Y's business for the last four years were :goodwill isThe profits shownYear ended31st March, 2017March, 2016 Profit 1,00,000 (after debiting loss of stock by fire50,000) +,, 2017 Loss 1,50,000, (includes voluntary retirementcompensation paid 780,000)2018 Profit 1,50,0002019 Profit 2,00,000Verification of books of accounts revealed the following:(1) During the year ended 31st March, 2017, a machine got destroyed in accidenand 360,000 was written off as loss in Profit & Loss Account.(i) On 1st July 2017, Two Computers costing 340,000 each were purchased anwere debited to Travelling Expenses Account on which depreciation is tocharged @ 10%'p.a. on Straight Line Method.Calculate the value of goodwill.
Answer» ANSWER: IDENTIFY the 'Accounting CONCEPTS' INVOLVED in the following: a) Production Manager of the company is interested to reflect the good industrial relations in the accounts. b) Machine is recorded at cost (Rs. 50,000) while the market VALUE is Rs. 45,000. c) Accounts are prepared at the end of every year. d) Same accounting methods are used year after year.

Ans. 71,60,000.)4. X purchased the business of y from 1st April, 2019. For this purposeall is to be valued at 100% of the average annual profits of the last four years.shown by Y's business for the last four years were :goodwill isThe profits shownYear ended31st March, 2017March, 2016 Profit 1,00,000 (after debiting loss of stock by fire50,000) +,, 2017 Loss 1,50,000, (includes voluntary retirementcompensation paid 780,000)2018 Profit 1,50,0002019 Profit 2,00,000Verification of books of accounts revealed the following:(1) During the year ended 31st March, 2017, a machine got destroyed in accidenand 360,000 was written off as loss in Profit & Loss Account.(i) On 1st July 2017, Two Computers costing 340,000 each were purchased anwere debited to Travelling Expenses Account on which depreciation is tocharged @ 10%'p.a. on Straight Line Method.Calculate the value of goodwill.

Answer»

IDENTIFY the 'Accounting CONCEPTS' INVOLVED in the following:

a) Production Manager of the company is interested to reflect the good industrial relations in the

accounts.

b) Machine is recorded at cost (Rs. 50,000) while the market VALUE is Rs. 45,000.