A and B are sharing profits in the ratio of 3: 1. According to their partnership...

 

Transcribed Image Text:

A and B are sharing profits in the ratio of 3: 1. According to their partnership deed, on reconstitution of a firm, "goodwill is to be valued at two and a half years purchase of the average profits of the last three completed years." The profits were: Year I Rs. 20,000, Year II. Rs. 30,000, Year III Rs. 40,000, Year IV Rs. 50,000, Year V Rs. 60,000. C is admitted for 1/5th share in profits at end of Year VI. The amount which 'C' will be required to bring by way of his share of goodwill will be A B C D Rs. 20,000 Rs. 25,000 Rs. 30,000 None of these A and B are sharing profits in the ratio of 3: 1. According to their partnership deed, on reconstitution of a firm, "goodwill is to be valued at two and a half years purchase of the average profits of the last three completed years." The profits were: Year I Rs. 20,000, Year II. Rs. 30,000, Year III Rs. 40,000, Year IV Rs. 50,000, Year V Rs. 60,000. C is admitted for 1/5th share in profits at end of Year VI. The amount which 'C' will be required to bring by way of his share of goodwill will be A B C D Rs. 20,000 Rs. 25,000 Rs. 30,000 None of these

Answer rating: 100% (QA)

ANS WER B Rs 25 000 EXPLANATION According to the partnership deed goodwill is to be value... View the full answer