Question 2 Chapter 3 – Unimax Class 12 Part 1 – 2021

Question 2 Chapter 3 - Unimax Class 12 Part 1 - 2021

Question 2 Chapter 3 – Unimax Class 12 Part 1

2. Calculate the firm’s Goodwill as on 1.1.21 on the basis of 2 years’ purchase of average normal profit of the last three years which are following :

Year  
2018 Rs. 40000 (including abnormal gain Rs. 4000)
2019 Rs. 50000 (after charging an abnormal loss of Rs. 10000)
2020 Rs. 45000 (excluding Rs. 6000 as insurance premium of firm’s property-now to be insured.

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

Profit for the year 2004 40000  
Less Abnormal Gain (already added) 4000 36000
Profit for the year 2005 50000  
Add Abnormal loss (already deducted) 10000 60000
Profit for the year 2006 45000  
Less Insurance Premium 6000 39000
Total adjusted profits   135000

Average Profits = Total Profits/ No. of years
                          = Rs. 135000/3
                          = Rs.45000
Goodwill = Average Profits x No. of years of purchase of average
                = Rs. 45000 x 2
               = Rs. 90000

 

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