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Interpreting Joint Bar Graphs

A partnership...

Question

A partnership firm earned net profits during the last 3 years as follows:
2019 - ₹ 1,90,000
2020 - ₹ 2,20,000
2021 - ₹ 2,50,000
Calculate the value of goodwill on the basis of 2 year's purchase of average profits during the above mentioned years.

[0.88 marks]

A

₹ 3,30,000

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B

₹ 4,40,000

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C

₹ 6,60,000

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D

₹ 2,20,000

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Solution

The correct option is B ₹ 4,40,000
$Average Profit$
$= \frac{₹ (1, 90, 000 + 2, 20, 000 + 2, 50, 000)}{3}$
$= \frac{₹ 6, 60, 000}{3}$
$= ₹ 2, 20, 000$
$Goodwill = ₹ 2, 20, 000 \times 2 = ₹ 4, 40, 000$

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