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Question : At the time of the Death of a partner, the Goodwill of the firm will be valued at two years’ purchase of the Average Profits of the last three years. The Profits for the year ended March 31, 2015, March 31, 2016, and March 31, 2017, were Rs.4,00,000, Rs.3,00,000, and Rs.2,41,000 ( debit balance ), respectively. The amount of Goodwill will be 

Option 1: 3,07,000

Option 2: 3,06,000

Option 3: 3,10,000

Option 4: None of the above


Team Careers360 12th Jan, 2024
Answer (1)
Team Careers360 18th Jan, 2024

Correct Answer: 3,06,000


Solution : Answer = 3,06,000

Total Profits = 4,00,000 + 3,00,000 + (2,41,000)
                    = 4,59000
Average profit = 4,59,000/3
                       = 1,53000
Goodwill = 1,53,000 × 2
                 = 306000
Hence, the correct option is 2.

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