4 :- Asin and Shreyas were partners sharing profits and losses in the ratio of 2 : 1. They admitted Shyam as a partner for 1/5th share in profits. For this purpose, the Goodwill of the firm was to be valued on the basis of three years’ purchase of the last five years’ average profit. Profits for the last five years ended 31st March were:
Calculate goodwill of the firm after adjusting the following
Profit of 2021-22 was calculated after charging Rs 25,000 for abnormal loss being goods lost by fire.
5 :- Tarang purchased Jyoti’s business with effect from 1st April, 2025. Profits shown by Jyoti’s Business for the last three financial years ended 31st March were:
2023 : Rs 1,00,000 (including an abnormal gain of Rs 12,500).
2024 : Rs 1,25,000 (after charging an abnormal loss of Rs 25,000)
2025: Rs 1,12,500 (excluding Rs 12,500 as insurance premium on firm’s property – now to be insured).
Calculate the value of the firm’s goodwill on the basis of two years’ purchase of the average profit of the last three years.
6 :- Abhay, Babu, and Charu are partners sharing profits and losses equally. They agree to admit Daman for an equal share of profits. For this purpose, the value of goodwill is to be calculated on the basis of four years’ purchase of the average profit of the last five years. These profits for the year ended 31st March were:
On 1st April 2024, a car for Rs 1,00,000 was purchased and debited to Travelling Expenses Account, on which depreciation is to be charged @ 25% p.a. Interest of Rs 10,000 on Non-Trade Investments is credited to Income for the year ended 31st March, 2024 and 2025.
Calculate the value of goodwill after adjusting the above.
7 :- Sumit purchased Amit’s business on 1st April, 2025. Goodwill was decided to be valued at two years’ purchase of average normal profit of the last four years. The profits for the past four years were:
In the year ended 31st March 2023 assets of the firm were not insured due to oversight. The insurance premium not paid was Rs 15,000.
Calculate the value of goodwill.
Question 1 to 3 (Average Profit Method)
Question 4 to 7 (Average Profit Method when Past Adjustments are made)
Question 8 to 9 (Weighted Average Profit Method)
Question 10 to 16 (Super Profit Method)
Question 17 to 21 (Calculation of Average Profit, Normal Rate of Return and Capital Employed)
Question 22 to 24 (Super Profit Method when Past Adjustments are Made)
Question 25 to 28 (Capitalisation Method)
Question 29 to 32 (Capitalisation Method)
Question 33 to 38 (Capitalisation of Super profit)