Q.No.2 | Chapter 3 – Goodwill: Nature and Valuation | T.S. Grewal 12 Class Book Keeping Part - A - Vol. 1

Question 02 Chapter 3 of +2-A

2. Profits for the five years ending on 31st March, are as follows: the Year 2015 − 4,00,000; Year 2016 − 3,98,000; Year 2017 − 4,50,000; Year 2018 − 4,45,000 and Year 2019 − 5,00,000. Calculate goodwill of the firm on the basis of 4 years' purchase of 5 years' average profit.

The solution of Question 02 Chapter 3 of +2-A:

Average Profit	=	Total Profit for past given years
		Number of years

Average Profit	=	4,00,000+3,98,000+4,50,000+4,45,000+ 5,00,000
		5

 

=	21,93,000
	5
=	4,38,600

Number of years’ purchase = 4

Goodwill	=	Average Profit X Number of years’ purchase
Goodwill	=	4,38,600 X 4
Goodwill	=	17,54,400

Also, Check out the solved question of previous Chapters: -

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

• Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
• Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
• Chapter No. 3 – Goodwill: Nature and Valuation
• Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
• Chapter No. 5 – Admission of a Partner
• Chapter No. 6 – Retirement/Death of a Partner
• Chapter No. 7 – Dissolution of a Partnership Firm

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 8 – Company Accounts –  Accounting for Share Capital
• Chapter No. 9 – Company Accounts – Issue of Debentures
• Chapter No. 10 – Redemption of Debentures

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 1 – Financial Statements of a Company
• Chapter No. 2 – Financial Statement Analysis 
• Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
• Chapter No. 4 – Accounting Ratios
• Chapter No. 5 – Cash Flow Statement

 

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