A, B and C are partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. They decide to take D into partnership for 1/4th share on 1st April, 2022. For this purpose, goodwill is to be valued at 3 times the average annual profits of the previous four or five years whichever is higher
A, B and C are partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. They decide to take D into partnership for 1/4th share on 1st April, 2022. For this purpose, goodwill is to be valued at 3 times the average annual profits of the previous four or five years whichever is higher. The agreed profits for goodwill purpose of the past five years are as follows:
| Year ending on 31st March 2018 | 1,30,000 |
| Year ending on 31st March 2019 | 1,20,000 |
| Year ending on 31st March 2020 | 1,50,000 |
| Year ending on 31st March 2021 | 1,10,000 |
| Year ending on 31st March 2022 | 2,00,000 |
Calculate the value of Goodwill.
[Ans. Goodwill ₹ 4,35,000.]
Anurag Pathak Answered question 3 days ago
