# Question 2 Chapter 3 of Class 12 Part – 1 VK Publication

Question 2 Chapter 3 of Class 12 Part - 1 VK Publication

Question 2 Chapter 3 of Class 12 Part – 1

2. Karnail purchased Jarnaiľs business on 1st April, 2017. The profits for the last 3 years are:
31st March, 2015- Rs. 40,000 (including an abnormal profit of Rs. 5,000)
31st March, 2016- Rs. 50,000 (after charging an abnormal loss of Rs. 10,000
31st March, 2017- Rs. 45,000 (excluding Rs. 5,000 as insurance premium of this year.)
Calculate the value of goodwill on the basis of two years’ of purchase of the average profit of the last three years.

## The solution of Question 2 Chapter 3 of Class 12 Part – 1: –

 Particulars 31st March , 2015 31st March, 2016 31st March, 2017 Net Profit 40,000 50,000 45,000 Less: Abnormal Profit 5,000 – – Add: Abnormal Loss – 10,000 – Less: Insurance Premium – – 5,000 Adjusted Net Profit 35,000 60,000 40,000

 Average Profit = Total Profits Number of years = 35,000 + 60,000 + 40,000 3 = 1,35,000 3 = 45,000

Goodwill = Average Profit x Number of Years’ Purchase = 45,000 x 2 = Rs. 90,000.

Comment if you have any questions.

Also, Check out the solved question of previous Chapters: –