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Calculate the the value of goodwill at the three year purchase of the average of the last three years profit the profit of first year was 16000 2nd year twice the profit of the 1st year and 3rd year for one and a half times of the profit of the second year?
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Calculate the the value of goodwill at the three year purchase of the ...
Calculation of Goodwill
- First year profit = 16000
- Second year profit = 2 x 16000 = 32000
- Third year profit = 1.5 x 32000 = 48000
- Average profit for last three years = (16000 + 32000 + 48000)/3 = 32000
Explanation
Goodwill is the value of the reputation of a business over and above the value of its tangible assets. It is an intangible asset that is created when a business has a good reputation, loyal customers, and a strong brand. Goodwill is often calculated when a business is sold or when there is a change in ownership.
In this case, the goodwill is being calculated at the three year purchase of the average of the last three years profit. The first year profit was given as 16000 and the second year profit was twice that of the first year, which is 32000. The third year profit was given as one and a half times that of the second year, which is 48000.
To calculate the average profit for the last three years, we add the profits of the three years and divide by 3. Therefore, the average profit for the last three years is (16000 + 32000 + 48000)/3 = 32000.
The value of goodwill can now be calculated as the difference between the purchase price and the net tangible assets of the business. Since the net tangible assets are not given in the question, we cannot calculate the exact value of goodwill. However, we know that it will be based on the average profit for the last three years, which is 32000.
In conclusion, the value of goodwill can be calculated based on the reputation of the business and the average profits for the last three years. It is an intangible asset that is often calculated when a business is sold or when there is a change in ownership.
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Calculate the the value of goodwill at the three year purchase of the average of the last three years profit the profit of first year was 16000 2nd year twice the profit of the 1st year and 3rd year for one and a half times of the profit of the second year?
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Calculate the the value of goodwill at the three year purchase of the average of the last three years profit the profit of first year was 16000 2nd year twice the profit of the 1st year and 3rd year for one and a half times of the profit of the second year? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about Calculate the the value of goodwill at the three year purchase of the average of the last three years profit the profit of first year was 16000 2nd year twice the profit of the 1st year and 3rd year for one and a half times of the profit of the second year? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Calculate the the value of goodwill at the three year purchase of the average of the last three years profit the profit of first year was 16000 2nd year twice the profit of the 1st year and 3rd year for one and a half times of the profit of the second year?.
Calculate the the value of goodwill at the three year purchase of the average of the last three years profit the profit of first year was 16000 2nd year twice the profit of the 1st year and 3rd year for one and a half times of the profit of the second year? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about Calculate the the value of goodwill at the three year purchase of the average of the last three years profit the profit of first year was 16000 2nd year twice the profit of the 1st year and 3rd year for one and a half times of the profit of the second year? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Calculate the the value of goodwill at the three year purchase of the average of the last three years profit the profit of first year was 16000 2nd year twice the profit of the 1st year and 3rd year for one and a half times of the profit of the second year?.
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