Question 03 Chapter 3 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 03 Chapter 3 of +2-A

Question 03 Chapter 3 of +2-A

3. Calculate the value of goodwill on the basis of three years’ purchase of the average  profit of the preceding five years which were as follows:

Year  2018-19 2017-18 2016-17 2015-16 2014-15
Profits 8,00,000 15,00,000 18,00,000 4,00,000 (Loss) 13,00,000

 

The solution of Question 03 Chapter 3 of +2-A

:

Average Profit Total Profit for past given years
Number of years
Average Profit 13,00,000+(-4,00,000)+18,00,000+15,00,000+ 8,00,000
5

 

  50,00,000
5
  = 10,00,000

Note: – In the year 2015-16 there is a loss, so this amount will be subtracted from the total profit

Number of years’ purchase = 3

Goodwill = Average Profit X Number of years’ purchase
Goodwill = 10,00,000 X 3
Goodwill = 30,00,000


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)

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

 

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 1 min - Question 03 Chapter 3 of +2-A - T.S. Grewal 12 Class Part - A Vol. 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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