Divya purchased Jyoti’s business on 1st April, 2023. Profits shown by Jyoti’s business for the last three financial years were: 2020 – 21: ₹ 1,00,000 (including profit on sale of machine (abnormal gain) of ₹ 12,500

Divya purchased Jyoti’s business on 1st April, 2023. Profits shown by Jyoti’s business for the last three financial years were: 2020 – 21: ₹ 1,00,000 (including profit on sale of machine (abnormal gain) of ₹ 12,500.

2021 – 22 : ₹ 1,25,000 (after charging loss of stock by fire (abnormal loss) of ₹ 25,000). 2022 – 23 : ₹ 1,12,500 (excluding ₹ 12,500 as insurance premium on firm’s property. now to be insured).

Calculate the value of firm’s goodwill on the basis of two year’s purchase of the average profit of the last three years.