The profit for the five years of a firm are as follows:YearProfit (Rs.)20134,00,00020143,98,00020154,50,00020164,45,00020175,00,000Calculate the goodw - Accountancy MCQ CUET Accountancy 2025 27 May Shift 2 2026 | ExamTest.live

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The profit for the five years of a firm are as follows:YearProfit (Rs.)20134,00,00020143,98,00020154,50,00020164,45,00020175,00,000Calculate the goodwill of the firm on the basis of 4 years purchase of 5 years average profits.

Solution & Step-by-step Explanation

Step 1: Calculate the total profit of 5 years. Total Profit = 4, 00, 000 + 3, 98, 000 + 4, 50, 000 + 4, 45, 000 + 5, 00, 000 = Rs. 21, 93, 000 Step 2: Calculate the Average Profit. Average Profit = \frac{21 , 93 , 000}{5} = Rs. 4, 38, 600 Step 3: Calculate the Goodwill. Goodwill = Average Profit \times Number of years purchase Goodwill = 4, 38, 600 \times 4 = Rs. 17, 54, 400

Try it yourself before checking the explanation above.

The profit for the five years of a firm are as follows:YearProfit (Rs.)20134,00,00020143,98,00020154,50,00020164,45,00020175,00,000Calculate the goodwill of the firm on the basis of 4 years purchase of 5 years average profits.

Rs. 16,20,500

Rs. 17,54,400

Rs. 18,24,800

Rs. 15,12,900

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