1.

From the following information ofNairutva and Rutvik's firm determine the value of goodwill of partnership firm on the basis ofcapitalisation of Weighted Average Profit Method.Year Profit (₹)2012-'13 45,0002013-'14 50,0002014-'15 65,0002015-'16 75,0002016-'17 90,000Additional information :(1) Business assets : ₹6,00,000(2) Business liabilities: ₹1,70,000(3) Normal expected return of business is 10%.plz give me the answer as fast as possibleMAY DEAR ❤️​

Answer»

Answer:

Explanation:

CALCULATION of weighted profits :

Since the profits are DISPLAYING an increasing trend , weighted average method are used to value goodwill

Particulars             2012-13        2013-14     2014-15    2015-16     2016-17

Profits earned       45,000       50,000     65,000     75,000     90,000

Weights                    1                  2                  3               4                   5    

Weighted profit        45,000      1,00,000    1,95,00    3,00,000     4,50,000

Weighted Average profit = sum of weighted profits / Total of weights

= 10,90,000 / 15 = 72667

Capital of firm = Assets - liabilities = 6,00,000 - 1,70,000 = 4,30,000

Value of the firm = 72667 / 10 x 100 = 7,26,670

Value of goodwill = 7,26,670 - 4,30,000 = RS 2,96,670  



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