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Profits of a firm for the year ended 31st March for the last five years were:

Year Ended Profits (₹)
31st March 2019 20,000
31st March 2020 24,000
31st March 2021 30,000
31st March 2022 25,000
31st March 2023 18,000

Calculate the value of goodwill on the basis of three years’ purchase of weighted average profit after assigning weights 1, 2, 3, 4 and 5 respectively to the profits for years ended 31st March 2019, 2020, 2021, 2022, and 2023.

[Ans.: Goodwill – ₹ 69,600.]

Anurag Pathak Changed status to publish April 17, 2023