The Profits and losses of a firm for the last four years: 2015 = Rs.�

1.	The Profits and losses of a firm for the last four years: 2015 = Rs. 30,000 2016 = Rs. 34,000 2017 = Rs. 12,000 (Loss) 2018 = Rs. 28,000 you are required to calculate the amount of goodwill on the basis of 5 years purchase of average profits of last 4 year.
Answer» Goodwill = Average profit × No. of years of purchase Average profit = (Toal profit)/(Number of years) = (30,000 + 34,000 - 12,000 + 28,000)/4 = 80,000/4 = Rs. 20,000 Goodwill = Average profit × No. of years of purchase. = Rs. 20,000 × 5 = Rs. 1,00,000

The Profits and losses of a firm for the last four years: 2015 = Rs. 30,000 2016 = Rs. 34,000 2017 = Rs. 12,000 (Loss) 2018 = Rs. 28,000 you are required to calculate the amount of goodwill on the basis of 5 years purchase of average profits of last 4 year.

Answer»

Goodwill = Average profit × No. of years of purchase

Average profit = (Toal profit)/(Number of years)

= (30,000 + 34,000 - 12,000 + 28,000)/4

= 80,000/4

= Rs. 20,000

Goodwill = Average profit × No. of years of purchase.

= Rs. 20,000 × 5

= Rs. 1,00,000

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The Profits and losses of a firm for the last four years: 2015 = Rs. 30,000 2016 = Rs. 34,000 2017 = Rs. 12,000 (Loss) 2018 = Rs. 28,000 you are required to calculate the amount of goodwill on the basis of 5 years purchase of average profits of last 4 year.

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