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 was ₹ 80,000.

Having regard to the risk involved. 15% is considered to be a fair return on the capital. Calculate value of goodwill on the basis of two year’s purchase of average super profit earned during the above mentioned three years.

Anurag Pathak Changed status to publish May 3, 2024
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