Question 08 Chapter 3 of +2 Part-1 – USHA Publication 12 Class Part – 1

Q 8 CH 3 Usha 2 Book 2018 Solution min 1024x576 - Question 08 Chapter 3 of +2 Part-1 - USHA Publication  12 Class Part - 1

Question 08 Chapter 3 of +2-Part-1

8. (Weighted Average Profit Method) The profits of Ram Mills for the last five years were as under:

Year  Profit/Loss
2015 10,000
2016 20,000
2017 30,000
2018 40,000
2019 60,000

Calculate the value of goodwill is 2 years purchase of average weighted profits. The weights are 1,2,3,4 and 5 in the year of 2015, 2016, 2017, 2018 and 201 9.

 

The solution of Question 08 Chapter 3 of +2 Part-1: – 

 

Calculation of Weighted Average Profit
Year
Adjusted Profit
(A)
Weight
(D)
Product
(E = C * D)

31st March, 2016 10,00 1 20,000
31st March, 2017 20,000 2 40,000
31st March, 2018 30,000 3 90,000
31st March, 2019 40,000 4 1,60,000
31st March, 2019 60,000 5 3,00,000
       
Total 15 6,00,000

 

Average Profit = Total Profit for past given years
    Number of years
     
  = 6,00,000
  15
     
  = 40,000

 

Number of years’ purchase = 2
Goodwill = Average Profit X Number of years’ purchase
Goodwill = 40,000 X 2
Goodwill = 80,000

 

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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 - Question 08 Chapter 3 of +2 Part-1 - USHA Publication  12 Class Part - 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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