30 Views

Question : Profits of last three years are Rs.4,20,000, Rs.3,90,000 and Rs.4,50,000. The value of goodwill on the basis of two years purchase of three year average profit is:

Option 1: Rs.3,60,000

Option 2: Rs.12,60,000

Option 3: Rs.8,40,000

Option 4: Rs.4,20,000


Team Careers360 18th Jan, 2024
Answer (1)
Team Careers360 20th Jan, 2024

Correct Answer: Rs.8,40,000


Solution : Average profit = Sum of profits/Total number of years = (Rs.4,20,000 + Rs.3,90,000 + Rs.4,50,000)/3 = Rs.4,20,000.
Goodwill = Average Profit X Number of years purchase = Rs.4,20,000 X 2 = Rs.8,40,000.
Hence, the correct option is 3.

Related Questions

MAHE Manipal M.Tech 2025
Apply
NAAC A++ Accredited | Accorded institution of Eminence by Govt. of India | NIRF Rank #4
Graphic Era (Deemed to be Uni...
Apply
NAAC A+ Grade | Among top 100 universities of India (NIRF 2024) | 40 crore+ scholarships distributed
Indrashil University | B.Tech...
Apply
Apply for B.Tech | AICTE Aproved | UGC Recognized | International Collaborations for Global Edge | 100% Placement Assistance
Manav Rachna-MBA Admissions 2025
Apply
41000+ Alumni network | Students from over 20 countries
Manav Rachna-B.Tech Admission...
Apply
NAAC A++ Grade | NBA Accredited B.Tech programs | 41000+ Alumni network | Students from over 20 countries
JSS University Noida MBA 2025
Apply
170+ Recruiters Including Samsung, Zomato, LG, Adobe and many more | Highest CTC 47 LPA
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