1.

The profit for the five years ending on 31st March, are as follows:Year 2014–₹ 4,00,000 Year 2015–₹ 3,98,000; Year 2016–₹ 4,50,000; Year 2017–₹ 4,45,000; Year 2018–₹ 5,00,000.Calculate goodwill of the firm on the basis of 4 years' purchase of 5 years' average profit.

Answer» The profit for the five years ending on 31st March, are as follows:

Year 2014–₹ 4,00,000 Year 2015–₹ 3,98,000; Year 2016–₹ 4,50,000; Year 2017–₹ 4,45,000; Year 2018–₹ 5,00,000.

Calculate goodwill of the firm on the basis of 4 years' purchase of 5 years' average profit.


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