A partnership firm earned net profits during the last three years ended 31st March, as follows:
A partnership firm earned net profits during the last three years ended 31st March, as follows:
2021 – ₹ 17,000; 2022 – ₹ 20,000; 2023 – ₹ 23,000.
Capital investment in the firm throughout the above-mentioned period has been ₹ 80,000. Having regard to the risk involved, 15% is considered to be a fair return on the capital. Calculate the value of goodwill on the basis of two years’ purchase of average super profit earned during the above-mentioned three years.
[Goodwill – ₹ 16,000.]
Anurag Pathak Changed status to publish April 17, 2023
