# Question 16 Chapter 3 – Unimax Class 12 Part 1 – 2021

Question 16 Chapter 3 – Unimax Class 12 Part 1

16. Goodwill is to be valued at two years’ purchase of 3 years normal average Profits of the firms. The Profits for 2018 is Rs. 20000 (including insurance claim received of Rs. 35000). The loss of 2019 is Rs. 15000 (including voluntary retirement compensation paid Rs. 105000). The Profit for 2020 is Rs. 75000 (including a profit of Rs. 30000 on sale of fixed assets). Calculate the value of goodwill as on 1.1.2021.

## The solution of Question 16 Chapter 3 – Unimax Class 12 Part 1:

 Rs. Rs. Profit for the year 2018 20000 Less Insurance claim (already added) 35000 (15000) Loss for the year 2019 15000 Add Voluntary retirement 105000 90000 Compensation (already deducted) Profit for the year 2020 75000 Less Profit on sale of fixed assets 30000 45000 Total net profits for 3 years 120000

Average Profits = Rs. 120000/3= Rs. 40000
Goodwill = Average Profits X Number of years of purchase
= Rs. 40000 X 2
= Rs. 80000

What is Partnership – Meaning and its Types

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)