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AAns Goodwill 3,63,0.5. Following information is available about the business of a firm:(0) Profits : In 2016, 340,000; In 2017. 50,000; In 2018, 260,000, (ii) Non-recurring income of 1,000 is included in the profits of 2017, (ii) Profits of 2016 havebeen reduced by R6,000 because goods were destroyed by fire, (iv) Goods have notbeen insured but it is thought to insure them in future. The insurance premiumestimated at 400 per year, (v) Reasonable remuneration of the proprietor of businessis 6,000 per year, but it has not been taken into account for calculation of abovementioned profits, (vi) Profits of 2018 include 5.000 income on investment.Goodwill is agreed to be valued at two years' purchase of the weighted averageprofits of the past three years. The appropriate weights to be used are:- |
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