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Arrange the following steps involved for the Valuation of Goodwill by Average Profit Method:

  1. Goodwill = Average Profit × No. of Year’s Purchase
  2. Average profit = Total Profits/No. of Years
  3. Calculate normal profit or loss for each of the past year, after adjusting any abnormalities

a) 4, 2, 3, 1

b) 1, 3, 4, 2

c) 2, 3, 1, 4

d) 3, 4, 2, 1

Anurag Pathak Changed status to publish April 17, 2023
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