X & Associates is a partnership firm, it intends to revalue its goodwill, average profit for the past five years is Rs. 11,000 per annum and goodwill is being valued 3 years purchase of average profit. What would be the value of the goodwill of the firm?

Rs.33,000

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Rs.11,000

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Rs.35,000

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Rs.25,000

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Solution

The correct option is A Rs.33,000
Under the average profit method the goodwill valuation/calculation of certain number of purchase of average profit of the firm
=11000*3=33000

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Q. X & Associates is a partnership firm, it intends to revalue its goodwill, average profit for the past five years is Rs. 15,000 per annum and goodwill is being valued 5 years purchase of super profit. What would be the value of the goodwill of the firm if normal profit of the firm is Rs.12,000?

Q. ABC are three partners in a firm, they decided to admit D, a fourth partner in the firm with 1/4 share of profit and loss in the firm. Firm decided to revalue the goodwill of the firm on the basis of 3 years purchase of past 4 years average profits. What would be the value of the firm if the past profit of the firm are as under?
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Q. The goodwill of a firm is valued at

R s . 1, 35, 000

3

years purchase of super profit. Determine the missing values:
Average Profit

= \frac{3, 60, 000}{3} = R s . 1, 20, 000

Normal Profit

= R s . . . . \times \frac{15}{100} = R s . . . .

Super Profit

=

Average Profit

-

Normal Profit

= R s . 1, 20, 000 - R s . . . . = R s . . .

Goodwill

=

Super Profit

\times

No. of years Purchase.

A, B and C share profits in the ratio 14:5:6. The goodwill of the firm is valued at 2 years' purchase of average profits of last 3 years. The profits of last 3 years are : Rs. 50,000; Rs. 55,000; Rs. 60,000. Calculate the value of goodwill.

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X & Associates is a partnership firm, it intends to revalue its goodwill, average profit for the past five years is Rs. 11,000 per annum and goodwill is being valued 3 years purchase of average profit. What would be the value of the goodwill of the firm?

The correct option is A Rs.33,000Under the average profit method the goodwill valuation/calculation of certain number of purchase of average profit of the firm =11000*3=33000

The correct option is A Rs.33,000
Under the average profit method the goodwill valuation/calculation of certain number of purchase of average profit of the firm
=11000*3=33000