, is included in the profits of the year . (c) The closing stock of the year was overvalued by ` , . (Answer: Average profit: ` , , ; Goodwill: ` , , ) . The following particulars are available in respect of the business carried on by a partnership firm: (i) Profits earned: : ` , ; : ` , and : ` , .
(ii) Profit of includes a non-recurring income of ` , . (iii) Profit of is reduced by ` , due to stock destroyed by fire. (iv) The stock was not insured. But, it is decided to insure the stock in future.
The insurance premium is estimated to be ` per annum. You are required to calculate the value of goodwill of the firm on the basis of years purchase of average profits of the last three years. (Answer: Average profit: ` , ; Goodwill: ` , ) Weighted average profit method . Find out the value of goodwill at three years purchase of weighted average profit of last four years.
Year Profit Weight , , , , (Answer: Weighted average profit: ` , ; Goodwill: ` , ) Purchase of super profit method . From the following details, calculate the value of goodwill at years purchase of super profit: (a) Total assets of a firm are ` , , (b) The liabilities of the firm are ` , , (c) Normal rate of return in this class of business is . %. (d) Average profit of the firm is ` , .
(Answer: Super profit: ` , ; Goodwill: ` , ). . A partnership firm earned net profits during the last three years as follows: : ` , ; : ` , and : ` , The capital investment of the firm throughout the above mentioned period has been ` , . Having regard to the risk involved, % is considered to be a fair return on capital employed in the business.
Calculate the value of goodwill on the basis of years purchase of