T.S. Grewal Class 12 Vol 1 2025-2026 Solutions Chapter 2 - Nature and Valuation of Goodwill – Detailed Q&A

Q: T.S. Grewal Class 12 Chapter 2 Q.2 - Nature and Valuation of Goodwill

Question 2 Profits for the five years ending on 31st March are as follows: 2021 ₹4,00,000; 2022 ₹3,98,000; 2023 ₹4,50,000; 2024 ₹4,45,000 and 2025 ₹5,00,000. Calculate the goodwill of the firm on the basis of 4 years’ purchase of 5 years’ average profit. Solution Average Profit = (₹4,00,000 + ₹3,98,000 + ₹4,50,000 + ₹4,45,000 + ₹5,00,000) / 5 = ₹21,93,000 / 5 = ₹4,38,600. Goodwill = ₹4,38,600 × 4 = &#8

Q: T.S. Grewal Class 12 Chapter 2 Q.3 - Nature and Valuation of Goodwill

Question 3 Purav and Purvi are partners in a firm sharing profits and losses in the ratio of 2 : 1. They admit Parv into partnership for a 1/4th share on 1st April, 2025. For this purpose, goodwill is to be valued at four times the average annual profit of the previous four or five years, whichever is higher. The agreed profits of the past five years are: 2021 ₹14,000; 2022 ₹15,500; 2023 ₹10,000; 2024 ₹16,000; 2025 ₹15,000. Calculate the value of goodwill. Solution

Q: T.S. Grewal Class 12 Chapter 2 Q.4 - Nature and Valuation of Goodwill

Question 4 Asin and Shreyas were partners sharing profits and losses in the ratio of 2 : 1. They admitted Shyam as a partner for a 1/5th share in profits. For this purpose, goodwill of the firm was to be valued on the basis of three years’ purchase of the last five years’ average profit. Profits for the last five years ended 31st March were: 2021 ₹1,25,000; 2022 ₹1,00,000; 2023 ₹1,87,500; 2024 (₹62,500); 2025 ₹1,25,000. Calculate goodwill after adjusting

Q: T.S. Grewal Class 12 Chapter 2 Q.5 - Nature and Valuation of Goodwill

Question 5 Tarang purchased Jyoti’s business with effect from 1st April, 2025. Profits shown by Jyoti’s business for the last three financial years ended 31st March were: 2023 ₹1,00,000 (including an abnormal gain of ₹12,500); 2024 ₹1,25,000 (after charging an abnormal loss of ₹25,000); 2025 ₹1,12,500 (excluding ₹12,500 as insurance premium on the firm’s property, now to be insured). Calculate the value of the firm’s goodwill on the bas

Q: T.S. Grewal Class 12 Chapter 2 Q.6 - Nature and Valuation of Goodwill

Question 6 Abhay, Babu and Charu are partners sharing profits and losses equally. They agree to admit Daman for an equal share of profit. For this purpose, the value of goodwill is to be calculated on the basis of four years’ purchase of the average profit of the last five years. The profits for the years ended 31st March were: 2021 ₹1,50,000; 2022 ₹3,50,000; 2023 ₹5,00,000; 2024 ₹7,10,000; 2025 (₹5,90,000). Adjustments: a car costing ₹1,00,000 was purch

Q: T.S. Grewal Class 12 Chapter 2 Q.7 - Nature and Valuation of Goodwill

Question 7 Sumit purchased Amit’s business on 1st April, 2025. Goodwill was decided to be valued at two years’ purchase of the average normal profit of the last four years. The profits for the past four years were: year ended 31st March, 2022 ₹80,000; 2023 ₹1,45,000; 2024 ₹1,60,000; 2025 ₹2,00,000. The books revealed that: (i) an abnormal loss of ₹20,000 was debited to the Profit & Loss Account for the year ended 31st March, 2022; (ii) a fixed asset

Q: T.S. Grewal Class 12 Chapter 2 Q.8 - Nature and Valuation of Goodwill

Question 8 Profits of a firm for the year ended 31st March for the last five years were: 2021 ₹20,000; 2022 ₹24,000; 2023 ₹30,000; 2024 ₹25,000; 2025 ₹18,000. Calculate the value of goodwill on the basis of three years’ purchase of the Weighted Average Profit, after assigning weights 1, 2, 3, 4 and 5 respectively to the profits for the years ended 31st March, 2021, 2022, 2023, 2024 and 2025. Solution Calculation of Weighted Average Profit YearProfit (₹)

Q: T.S. Grewal Class 12 Chapter 2 Q.9 - Nature and Valuation of Goodwill

Question 9 Raman and Daman are partners sharing profits in the ratio of 60 : 40 and for the last four years they have been getting annual salaries of ₹50,000 and ₹40,000 respectively. The annual accounts have shown the following net profit before charging partners’ salaries: year ended 31st March, 2023 ₹1,40,000; 2024 ₹1,01,000 and 2025 ₹1,30,000. On 1st April, 2025, Zeenu is admitted to the partnership for a 1/4th share in profit (without any salary). Goodwil

Q: T.S. Grewal Class 12 Chapter 2 Q.10 - Nature and Valuation of Goodwill

Question 10 The capital of the firm of Anuj and Benu is ₹10,00,000 and the market rate of interest is 15%. Annual salary to the partners is ₹60,000 each. The profits for the last three years were ₹3,00,000, ₹3,60,000 and ₹4,20,000. Goodwill of the firm is to be valued on the basis of two years’ purchase of the last three years’ average super profit. Calculate the goodwill of the firm. (CBSE 2019) Solution Average Profit = (₹3,00,000 + ₹3,60,0

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T.S. Grewal Class 12 Chapter 2 Q.1 - Nature and Valuation of Goodwill

Question 1

Goodwill is to be valued at three years’ purchase of four years’ average profit. Profits for the last four years ending on 31st March of the firm were: 2022 ₹12,000; 2023 ₹18,000; 2024 ₹16,000; 2025 ₹14,000. Calculate the amount of goodwill.

Solution

Average Profit = (₹12,000 + ₹18,000 + ₹16,000 + ₹14,000) / 4 = ₹60,000 / 4 = ₹15,000.

Goodwill = Average Profit × Number of years’ purchase = ₹15,000 × 3 = ₹45,000.

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T.S. Grewal Class 12 Chapter 2 Q.2 - Nature and Valuation of Goodwill

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T.S. Grewal Class 12 Chapter 2 Q.8 - Nature and Valuation of Goodwill

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T.S. Grewal Class 12 Vol 1 2025-2026 Solutions Chapter 2 - Nature and Valuation of Goodwill

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