CBSE Class 12-commerce Answered
the goodwill of a firm is estimated at two year purchase of the average profit of the last 5 year . if goodwill of the firm is determined at 1,24,200 and profit or losses of last 4 year is given as;
year profit
2010 ?
2011 40,000(loss)
2012 92,000
2013 70,000
2014 55,000
CALCULATE PROFIT OR LOSS EARNED BY THE FIRM IN THE YEAR 2010
Asked by vishalainghkvs | 12 Feb, 2019, 09:53: AM
Expert Answer
Let profit for the year 2010 be Rs.k
Using simple average method of Goodwill:
Goodwill = Avereage of last 5years * No. of years of purchase
Using simple average method of Goodwill:
Goodwill = Avereage of last 5years * No. of years of purchase
Substituiting the values given,
124200 = (k-40000+92000+70000+55000)/5 * 2
124200/2 * 5 = k+177000
124200 = (k-40000+92000+70000+55000)/5 * 2
124200/2 * 5 = k+177000
310500 = k + 177000
k = 133500
Therefore, Profit for the year 2010 is 133500.
Answered by Surabhi Gawade | 12 Feb, 2019, 10:14: AM
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