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The profits of last three years are Rs. 42,000; Rs. 39,000 and Rs. 45,000. Find out the goodwill of two years purchase.
- a)Rs. 42,000.
- b)Rs. 84,000.
- c)Rs. 1,26,000.
- d)none
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
The profits of last three years are Rs. 42,000; Rs. 39,000 and Rs. 45,...
Avg of last 3 profit is (42000+45000+39000)/3=42000
no. of purchase year is 2 i.e 42000*2= 84000 is firm's goodwill
no. of purchase year is 2 i.e 42000*2= 84000 is firm's goodwill
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The profits of last three years are Rs. 42,000; Rs. 39,000 and Rs. 45,...
Given:
The profits of the last three years are Rs. 42,000, Rs. 39,000, and Rs. 45,000.
To Find:
The goodwill at two years' purchase.
Solution:
Goodwill is an intangible asset that represents the value of a business beyond its tangible assets. It is determined by multiplying the average profit of the business by the number of years' purchase.
Step 1: Calculate the average profit:
Average profit = (Profit of Year 1 + Profit of Year 2 + Profit of Year 3) / Number of years
= (Rs. 42,000 + Rs. 39,000 + Rs. 45,000) / 3
= Rs. 126,000 / 3
= Rs. 42,000
Step 2: Calculate the goodwill:
Goodwill = Average profit * Number of years' purchase
= Rs. 42,000 * 2
= Rs. 84,000
Therefore, the goodwill at two years' purchase is Rs. 84,000.
The profits of the last three years are Rs. 42,000, Rs. 39,000, and Rs. 45,000.
To Find:
The goodwill at two years' purchase.
Solution:
Goodwill is an intangible asset that represents the value of a business beyond its tangible assets. It is determined by multiplying the average profit of the business by the number of years' purchase.
Step 1: Calculate the average profit:
Average profit = (Profit of Year 1 + Profit of Year 2 + Profit of Year 3) / Number of years
= (Rs. 42,000 + Rs. 39,000 + Rs. 45,000) / 3
= Rs. 126,000 / 3
= Rs. 42,000
Step 2: Calculate the goodwill:
Goodwill = Average profit * Number of years' purchase
= Rs. 42,000 * 2
= Rs. 84,000
Therefore, the goodwill at two years' purchase is Rs. 84,000.
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The profits of last three years are Rs. 42,000; Rs. 39,000 and Rs. 45,000. Find out the goodwill of two years purchase.a)Rs. 42,000.b)Rs. 84,000.c)Rs. 1,26,000.d)noneCorrect answer is option 'B'. Can you explain this answer?
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The profits of last three years are Rs. 42,000; Rs. 39,000 and Rs. 45,000. Find out the goodwill of two years purchase.a)Rs. 42,000.b)Rs. 84,000.c)Rs. 1,26,000.d)noneCorrect answer is option 'B'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The profits of last three years are Rs. 42,000; Rs. 39,000 and Rs. 45,000. Find out the goodwill of two years purchase.a)Rs. 42,000.b)Rs. 84,000.c)Rs. 1,26,000.d)noneCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The profits of last three years are Rs. 42,000; Rs. 39,000 and Rs. 45,000. Find out the goodwill of two years purchase.a)Rs. 42,000.b)Rs. 84,000.c)Rs. 1,26,000.d)noneCorrect answer is option 'B'. Can you explain this answer?.
The profits of last three years are Rs. 42,000; Rs. 39,000 and Rs. 45,000. Find out the goodwill of two years purchase.a)Rs. 42,000.b)Rs. 84,000.c)Rs. 1,26,000.d)noneCorrect answer is option 'B'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The profits of last three years are Rs. 42,000; Rs. 39,000 and Rs. 45,000. Find out the goodwill of two years purchase.a)Rs. 42,000.b)Rs. 84,000.c)Rs. 1,26,000.d)noneCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The profits of last three years are Rs. 42,000; Rs. 39,000 and Rs. 45,000. Find out the goodwill of two years purchase.a)Rs. 42,000.b)Rs. 84,000.c)Rs. 1,26,000.d)noneCorrect answer is option 'B'. Can you explain this answer?.
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