A and B are partners sharing profits profits in the ratio of 3: 2. They decided...
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A and B are partners sharing profits profits in the ratio of 3: 2. They decided to admit C as a partner from 1st April, 2018 on the following terms: (i) C will be given 2/5th share of the profit. (ii) Goodwill of the firm will be valued at two years purchase of three years normal average profit of the firm. Profit of the previous three years ended 31st March, were: 2018---Profit Rs.30, 000(after debiting loss of stock by fire Rs. 40,000) 2017---Loss Rs. 80,000 (includes voluntary retirement compensation paid Rs. 1, 10,000 ). 2016---Profit Rs.1, 10, 000 (including a gain (profit) of Rs. 30, 000 on the sale of fixed assets). you are required to value the goodwill. A and B are partners sharing profits profits in the ratio of 3: 2. They decided to admit C as a partner from 1st April, 2018 on the following terms: (i) C will be given 2/5th share of the profit. (ii) Goodwill of the firm will be valued at two years purchase of three years normal average profit of the firm. Profit of the previous three years ended 31st March, were: 2018---Profit Rs.30, 000(after debiting loss of stock by fire Rs. 40,000) 2017---Loss Rs. 80,000 (includes voluntary retirement compensation paid Rs. 1, 10,000 ). 2016---Profit Rs.1, 10, 000 (including a gain (profit) of Rs. 30, 000 on the sale of fixed assets). you are required to value the goodwill.
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Related Book For
Accounting What the Numbers Mean
ISBN: 978-0078025297
10th edition
Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele
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