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Question 25 Chapter 3 of USHA Publication 12 Class Part – 1

Question 25 Chapter 3 of +2 Part-1 - USHA Publication 12 Class Part - 1
Question 25 Chapter 3 of +2 Part-1 - USHA Publication 12 Class Part - 1

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Question 25 Chapter 3 of USHA Publication 12 Class Part – 1

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25. (Average Profits Method/When profits are given) B and C agree to value goodwill at three years purchase of the average profits of the last five years for admitting A as a partner. Profits of the last five years were ₹ 20,000 ; ₹ 15,000 ; ₹ 17,000 ; ₹ 23,000 and ₹ 18,000. Calculate the amount of goodwill.

 

The solution of Question 25 Chapter 3 of USHA Publication 12 Class Part – 1: – 

Year Profit 
1st 20,000
2nd 15,000
3rd 17,000
4th 23,000
5th 18,000
Total 93,000
   
Average Adjusted profit=Total adjusted profit
  No. of year purchases
   
 =93,000
  5
 18,600

 

Capitalised value of the Goodwill=Average adjusted Profits x Number of years’ purchase
 =18,600 x 3
 =55,800

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

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

 

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

+2 Book 1-min
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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