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Question 03 Chapter 3 of +2 Part-1 – USHA Publication 12 Class Part – 1

Question 03 Chapter 3 of +2- Part-
Q-3 - CH-3 - Usha +2 Book 2018 - Solution

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Question 03 Chapter 3 of +2-Part-1

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3. (Average Profit Method) Calculate goodwill at two years of purchase of average profits of last three years.

Year Profit
11,500
2Three times of 1st year profit
31½ times profits of second year

 

 

The solution of Question 03 Chapter 3 of +2 Part-1: – 

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Average Profit=Total Profit for past given years
  Number of years
   
 =1,500 + 4,500 + 6,750
 3
   
 =12,750
 3
   
 =4,250

 

Number of years’ purchase=2
Goodwill=Average Profit X Number of years’ purchase
Goodwill=4,250 X 2
Goodwill=8,500

 

 

Working Note : –

*1 Calculation of Profits of last three years

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1st year’s Profit=1,500  
2nd year’s Profit=Three times of 1st year profit  
 =1,500X3
 
 =4,500/-  

 

3rd year’s Profit=1½ times profits of second year  
 =4,500X1.5
 
 =6,750/-  

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

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

 

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

+2 Book 1-min
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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