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Question 03 Chapter 3 of +2-Part-1
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Table of Contents
3. (Average Profit Method) Calculate goodwill at two years of purchase of average profits of last three years.
Year | Profit |
1 | 1,500 |
2 | Three times of 1st year profit |
3 | 1½ 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
1st year’s Profit | = | 1,500 | ||
2nd year’s Profit | = | Three times of 1st year profit | ||
= | 1,500 | X | 3 | |
= | 4,500/- |
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1st year’s Profit | = | 1,500 | ||
2nd year’s Profit | = | 1½ times profits of second year | ||
= | 4,500 | X | 1.5 | |
= | 6,750/- |
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Also, Check out the solved question of previous Chapters: –
Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution
- Chapter No. 1 – Accounting Not for Profit Organisations
- Chapter No. 2 – Partnership Accounts – I (Introduction)
- Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
- Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
- Chapter No. 8 – Company Accounts (Share Capital)
- Chapter No. 9 – Company Accounts (Issue of Debentures)
- Chapter No. 10 – Company Accounts (Redemption of Debentures)
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis- Comparative and Common Size
- Chapter No. 4 – Ratio Analysis
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
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