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The profits of the last three years are 8,000,13,000 and 18,000. The goodwill is valued at2 years' purchase of the average profits of lastthree years. The value of goodwill will be –(a) 20,000(b) 25,000(c) 26,000(d) 30,000 |
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Answer» Average profits of 5 year= 20000 + 18000 +2000 +5000 +5000/5 = 10000 Calculation of GOODWILL = 10000* 1.5 = 15000 |
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