Question 1 Chapter 3 – Unimax Class 12 Part 1 – 2021

Question 1 Chapter 3 - Unimax Class 12 Part 1 - 2021

Question 1 Chapter 3 – Unimax Class 12 Part 1

1. Calculate the value of goodwill as on 1.4.21 if it is to be valued at two years’ purchase of the average profit of last five years. The profits and losses are as follows :

Year Profit/Loss (Rs.)
2016-17 40000 (Profit)
2017-18 60000 (Profit)
2018-19 30000 (Profit)
2019-20 20000 (Loss)
2020-21 10000 (Loss)

The solution of Question 1 Chapter 3 – Unimax Class 12 Part 1:

Year Profits (loss)
2001-02 40000
2002-03 60000
2003-04 30000
2004-05 (20000)
2005-06 (10000)
Total Net Profits 100000

Average Profits = Rs. 100000/5= Rs. 20000
Goodwill = Rs. 20000 x 2 years = Rs. 40000

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

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