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A firm’s profits for the last …

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A firm’s profits for the last three years are Rs. 5,00,000; Rs. 4,00,000 and Rs. 6,00,000. Calculate value of firm’s goodwill on the basis of four years’ purchase of the average profits for the last three years.

Posted by Tenheiba Meetei 4 months, 4 weeks ago

CBSE > Class 12 > Accountancy

2 answers

Sehajveer Singh 4 months, 3 weeks ago

Firstly you have to calculate A.P as follows.. Step 1:5L + 4L + 6L= 15L. Step2: divide total by 3 because we added three values.. Its answer will be 500000 Step3: now they said calculate goodwill on basis of 4 years. Step4:now multiply your answer with 4. It will be 500000×4=20,00000 This is how goodwill will be calculated!

Sanchit Kapri 4 months, 3 weeks ago

Sir question doubt

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