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The profits for 1998-99 are Rs. 2,000; for 1999-2000 is Rs. 26,100 and for 2000-01 is Rs. 31,200. Closing stock for 1999-2000 and 2000-01 includes the defective items of Rs. 2,200 and Rs. 6,200 respectively which were considered as having market value NIL. Calculate goodwill on average profit method.
- a)Rs. 23,700.
- b)Rs. 17,700.
- c)Rs. 13,700.
- d)Rs. 17,300.
Correct answer is option 'B'. Can you explain this answer?
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Most Upvoted Answer
The profits for 1998-99 are Rs. 2,000; for 1999-2000 is Rs. 26,100 and...
Given:
Profit in 1998-99 = Rs. 2,000
Profit in 1999-2000 = Rs. 26,100 (including defective stock of Rs. 2,200)
Profit in 2000-01 = Rs. 31,200 (including defective stock of Rs. 6,200)
To find: Goodwill on the average profit method
Solution:
Step 1: Calculate the total profits for the three years
Total profits = 2,000 + 26,100 + 31,200 = Rs. 59,300
Step 2: Calculate the average profit
Average profit = Total profits / Number of years
Average profit = 59,300 / 3 = Rs. 19,766.67
Step 3: Adjust the profits for the defective stock
Adjusted profit for 1999-2000 = 26,100 - 2,200 = Rs. 23,900
Adjusted profit for 2000-01 = 31,200 - 6,200 = Rs. 25,000
Step 4: Calculate the total adjusted profits
Total adjusted profits = 2,000 + 23,900 + 25,000 = Rs. 50,900
Step 5: Calculate the value of goodwill
Goodwill = Average profit x Number of years - Total adjusted profits
Goodwill = 19,766.67 x 3 - 50,900
Goodwill = Rs. 17,700
Therefore, the value of goodwill on the average profit method is Rs. 17,700 (option B).
Profit in 1998-99 = Rs. 2,000
Profit in 1999-2000 = Rs. 26,100 (including defective stock of Rs. 2,200)
Profit in 2000-01 = Rs. 31,200 (including defective stock of Rs. 6,200)
To find: Goodwill on the average profit method
Solution:
Step 1: Calculate the total profits for the three years
Total profits = 2,000 + 26,100 + 31,200 = Rs. 59,300
Step 2: Calculate the average profit
Average profit = Total profits / Number of years
Average profit = 59,300 / 3 = Rs. 19,766.67
Step 3: Adjust the profits for the defective stock
Adjusted profit for 1999-2000 = 26,100 - 2,200 = Rs. 23,900
Adjusted profit for 2000-01 = 31,200 - 6,200 = Rs. 25,000
Step 4: Calculate the total adjusted profits
Total adjusted profits = 2,000 + 23,900 + 25,000 = Rs. 50,900
Step 5: Calculate the value of goodwill
Goodwill = Average profit x Number of years - Total adjusted profits
Goodwill = 19,766.67 x 3 - 50,900
Goodwill = Rs. 17,700
Therefore, the value of goodwill on the average profit method is Rs. 17,700 (option B).
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The profits for 1998-99 are Rs. 2,000; for 1999-2000 is Rs. 26,100 and...
2000+26100+31200/3=17676. it is actually 17700
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The profits for 1998-99 are Rs. 2,000; for 1999-2000 is Rs. 26,100 and for 2000-01 is Rs. 31,200. Closing stock for 1999-2000 and 2000-01 includes the defective items of Rs. 2,200 and Rs. 6,200 respectively which were considered as having market value NIL. Calculate goodwill on average profit method.a)Rs. 23,700.b)Rs. 17,700.c)Rs. 13,700.d)Rs. 17,300.Correct answer is option 'B'. Can you explain this answer?
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The profits for 1998-99 are Rs. 2,000; for 1999-2000 is Rs. 26,100 and for 2000-01 is Rs. 31,200. Closing stock for 1999-2000 and 2000-01 includes the defective items of Rs. 2,200 and Rs. 6,200 respectively which were considered as having market value NIL. Calculate goodwill on average profit method.a)Rs. 23,700.b)Rs. 17,700.c)Rs. 13,700.d)Rs. 17,300.Correct answer is option 'B'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The profits for 1998-99 are Rs. 2,000; for 1999-2000 is Rs. 26,100 and for 2000-01 is Rs. 31,200. Closing stock for 1999-2000 and 2000-01 includes the defective items of Rs. 2,200 and Rs. 6,200 respectively which were considered as having market value NIL. Calculate goodwill on average profit method.a)Rs. 23,700.b)Rs. 17,700.c)Rs. 13,700.d)Rs. 17,300.Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The profits for 1998-99 are Rs. 2,000; for 1999-2000 is Rs. 26,100 and for 2000-01 is Rs. 31,200. Closing stock for 1999-2000 and 2000-01 includes the defective items of Rs. 2,200 and Rs. 6,200 respectively which were considered as having market value NIL. Calculate goodwill on average profit method.a)Rs. 23,700.b)Rs. 17,700.c)Rs. 13,700.d)Rs. 17,300.Correct answer is option 'B'. Can you explain this answer?.
The profits for 1998-99 are Rs. 2,000; for 1999-2000 is Rs. 26,100 and for 2000-01 is Rs. 31,200. Closing stock for 1999-2000 and 2000-01 includes the defective items of Rs. 2,200 and Rs. 6,200 respectively which were considered as having market value NIL. Calculate goodwill on average profit method.a)Rs. 23,700.b)Rs. 17,700.c)Rs. 13,700.d)Rs. 17,300.Correct answer is option 'B'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The profits for 1998-99 are Rs. 2,000; for 1999-2000 is Rs. 26,100 and for 2000-01 is Rs. 31,200. Closing stock for 1999-2000 and 2000-01 includes the defective items of Rs. 2,200 and Rs. 6,200 respectively which were considered as having market value NIL. Calculate goodwill on average profit method.a)Rs. 23,700.b)Rs. 17,700.c)Rs. 13,700.d)Rs. 17,300.Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The profits for 1998-99 are Rs. 2,000; for 1999-2000 is Rs. 26,100 and for 2000-01 is Rs. 31,200. Closing stock for 1999-2000 and 2000-01 includes the defective items of Rs. 2,200 and Rs. 6,200 respectively which were considered as having market value NIL. Calculate goodwill on average profit method.a)Rs. 23,700.b)Rs. 17,700.c)Rs. 13,700.d)Rs. 17,300.Correct answer is option 'B'. Can you explain this answer?.
Solutions for The profits for 1998-99 are Rs. 2,000; for 1999-2000 is Rs. 26,100 and for 2000-01 is Rs. 31,200. Closing stock for 1999-2000 and 2000-01 includes the defective items of Rs. 2,200 and Rs. 6,200 respectively which were considered as having market value NIL. Calculate goodwill on average profit method.a)Rs. 23,700.b)Rs. 17,700.c)Rs. 13,700.d)Rs. 17,300.Correct answer is option 'B'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
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The profits for 1998-99 are Rs. 2,000; for 1999-2000 is Rs. 26,100 and for 2000-01 is Rs. 31,200. Closing stock for 1999-2000 and 2000-01 includes the defective items of Rs. 2,200 and Rs. 6,200 respectively which were considered as having market value NIL. Calculate goodwill on average profit method.a)Rs. 23,700.b)Rs. 17,700.c)Rs. 13,700.d)Rs. 17,300.Correct answer is option 'B'. Can you explain this answer?, a detailed solution for The profits for 1998-99 are Rs. 2,000; for 1999-2000 is Rs. 26,100 and for 2000-01 is Rs. 31,200. Closing stock for 1999-2000 and 2000-01 includes the defective items of Rs. 2,200 and Rs. 6,200 respectively which were considered as having market value NIL. Calculate goodwill on average profit method.a)Rs. 23,700.b)Rs. 17,700.c)Rs. 13,700.d)Rs. 17,300.Correct answer is option 'B'. Can you explain this answer? has been provided alongside types of The profits for 1998-99 are Rs. 2,000; for 1999-2000 is Rs. 26,100 and for 2000-01 is Rs. 31,200. Closing stock for 1999-2000 and 2000-01 includes the defective items of Rs. 2,200 and Rs. 6,200 respectively which were considered as having market value NIL. Calculate goodwill on average profit method.a)Rs. 23,700.b)Rs. 17,700.c)Rs. 13,700.d)Rs. 17,300.Correct answer is option 'B'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice The profits for 1998-99 are Rs. 2,000; for 1999-2000 is Rs. 26,100 and for 2000-01 is Rs. 31,200. Closing stock for 1999-2000 and 2000-01 includes the defective items of Rs. 2,200 and Rs. 6,200 respectively which were considered as having market value NIL. Calculate goodwill on average profit method.a)Rs. 23,700.b)Rs. 17,700.c)Rs. 13,700.d)Rs. 17,300.Correct answer is option 'B'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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