704 Views

Question : Following were the profits of the firm for the last 3 years

Years         Profit
2019-2020 3,00,000 (including abnormal gain of Rs 90,000)
2020-2021

  2,40,0000 (after charging abnormal loss of Rs 1,20,000)

2021-2022

3,60,000 (excluding Rs 1,20,000 payable on the insurance of  machinery)

Goodwill of  the firm on the basis of 4 years purchase of the average profit for the last three years will be 

 

Option 1: Rs 12,00,000

Option 2: RS 10,80,000

Option 3: Rs 12,80,000

Option 4: none of these 


Team Careers360 21st Jan, 2024
Answer (1)
Team Careers360 23rd Jan, 2024

Correct Answer: RS 10,80,000


Solution : Answer = Rs 10,80,000

Adjusted profit

2019-2020

3,00,0000-90,000= Rs 2,10,000

2020-2021

 2,40,000 + 1,20,000= Rs 3,60,000

2021-2022

 Rs 3,60,000-1,20,000= Rs 2,40,000

Total adjusted profits = 8,10,000

Adjusted average profit= 8,10,000/3 = Rs 2,70,000

Goodwill = 2,70,000 X 4= 10,80,000
Hence, the correct option is 2.

Related Questions

Amity University, Noida Law A...
Apply
700+ Campus placements at top national and global law firms, corporates and judiciaries
Amity University, Noida BBA A...
Apply
Ranked amongst top 3% universities globally (QS Rankings)
Amity University | M.Tech Adm...
Apply
Ranked amongst top 3% universities globally (QS Rankings).
Great Lakes PGPM & PGDM Admis...
Apply
Admissions Open | Globally Recognized by AACSB (US) & AMBA (UK) | 17.3 LPA Avg. CTC for PGPM 2024
Graphic Era (Deemed to be Uni...
Apply
NAAC A+ Grade | Among top 100 universities of India (NIRF 2024) | 40 crore+ scholarships distributed
Amity University Noida B.Tech...
Apply
Among Top 30 National Universities for Engineering (NIRF 2024) | 30+ Specializations | AI Powered Learning & State-of-the-Art Facilities
View All Application Forms

Download the Careers360 App on your Android phone

Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile

150M+ Students
30,000+ Colleges
500+ Exams
1500+ E-books