Question 06 Chapter 3 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 06 Chapter 3 of +2-A

Question 06 Chapter 3 of +2-A

6. Annu, Baby and Chetan are partners in firm sharing profits and losses equally. They decide to take Deep into partnership from 1st April 2019 for 1/5th share in the future profits. For this purpose, goodwill is to be valued at 100% of the average annual profits of the previous three or four years, whichever is higher. The annual profits for the purpose of goodwill for the
past four years were:
Year Ended Profit
31st March, 2019 2,88,000;
31st March, 2018 1,81,800;
31st March, 2017 1,87,200;
31st March, 2016 2,53,200.
Calculate the value of goodwill.

 

The solution of Question 06 Chapter 3 of +2-A

:

Average Profit For 3 years’ Total Profit for past given years
Number of years
Average Profit 2,88,000+1,81,800+1,87,200
3

 

  6,57,000
3
  = 2,19,000

 

Average Profit For 4 years’ 2,88,000+1,81,800+1,87,200+2,53,200
4

 

  9,10,200
4
  = 2,27,550

Goodwill is to be valued at 100% of the average annual profits of the previous three or four years, whichever is higher

Goodwill = 2,27,550

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 06 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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