Question 09 Chapter 3 of +2-Part-1
9. (Weighted Average Profit Method) Calculate the value of goodwill of a firm on the basis of three years purchase of the weighted average profit of the last four years. The profits of last four years were:
| Year | Profit/Loss |
| 2014-15 | 5,000 |
| 2015-16 | 5,200 |
| 2016-17 | 9,300 |
| 2017-18 | 10,700 |
During 2014-15, there was abnormal loss of Rs.1,000 due to theft and in 2017-18 there was a profit from sale of land amounting to Rs.4,000. In 2015-16, closing stock was over valued by Rs.1,200. The weights are 1,2,3 and 4 for the year 2014-15,2015-16,2016-17 and 2017-18 respectively.
The solution of Question 09 Chapter 3 of +2 Part-1: –
| Calculation of Adjusted Profit |
||||
| Particulars / Year Ended |
2014-15 | 2015-16 |
2016-17 |
2017-18 |
| Profit/(Loss) | 5,000 | 5,200 | 9,300 | 10,700 |
| Add: Abnormal Loss | 1,000 | |||
| Less: Profit on sale of land | -4,000 | |||
| Less: Overvaluation of Closing Stock | – 1,200 | |||
| Add: Overvaluation of Opening Stock | 1,200 | |||
| Total | 6,000 | 4,000 | 10,500 | 6,700 |
| Calculation of Weighted Average Profit |
|||
| Year |
Adjusted Profit (A) | Weight (D) |
Product (E = C * D) |
| 2014-15 | 6,000 | 1 | 6,000 |
| 2015-16 | 4,000 | 2 | 8,000 |
| 2016-17 | 10,500 | 3 | 31,500 |
| 2017-18 | 6,700 | 4 | 26,800 |
| Total | 10 | 72,300 | |
| Weighted Average Profit | = | Total weight Profit for past given years |
| Total weight | ||
| = | 72,300 | |
| 10 | ||
| = | 7,230 |
| Number of years’ purchase | = | 2 |
| Goodwill | = | Weighted Average Profit X Number of years’ purchase |
| Goodwill | = | 7,230 X 3 |
| Goodwill | = | 21,690 |
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Chapter-Wise Solution of Usha Publication Accountancy – Part 1 Class 12 – Session 2024-25 as per the PSEB curriculum
Check out Solutions to all questions of the every chapter shown as under. The Solution of Accountancy – Part 1 Class 12 – Session 2024-25 is provided as per the new book published by Usha Publication.
Chapter No. 1 – Accounting Not-for-Profit Organisations (Deleted from the Syllabus)
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)
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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)
Also, Check out our Comprehensive Chapter-wise solution of Advanced Accountancy Part 1 Class 12 by Unimax Publication
- Chapter No. 1 – Accounts of Non-Profit Organisations (Deleted from the Syllabus)
- Chapter No. 2 – Partnership Accounts – I (Basic Concepts)
- Chapter No. 3 – Partnership Accounts – II (Goodwill)
- Chapter No. 4 – Partnership Accounts – III (Change in Profit Sharing Ratio among Existing Partners)
- 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)
Check out Part 2 of both books.
In Class 12th the accountancy has 2 books i.e. Part 1 and Part 2. The Books related to the Part 1 are shown above. but If you want to know more about Part 2, you can check it out from the following links. We have provided the links to both books i.e. Accountancy Part 2 by Usha Publication and Advanced Accountancy Part 2 by Unimax Publication.
1. Accountancy – Part 2 Class 12 – Session 2024-25 By Usha Publication
2. Advanced Accountancy Part 2 Class 12 by Unimax Publication