Experts please help me in this
Solution :
Calculation of Average profit
it's
average profit: 4, 70,000/5
94000
goodwill = average profit × number of year's purchase
94000 × 4
376000
note: profit of 2015 : 2, 00,000 + 40,000 - (25℅ of 40,000)
2, 40,000 - 10,000
2, 30,000
In 2015, moped costing Rs 40,000 was purchased at it was wrongly debited to travelling expense account. After rectification the profit of 2015 will be increase. Depreciation on moped Rs 10,000 was not charged to profit and loss account of 2015.
Calculation of Average profit
| Year | Rupees |
| 2013 | 60,000(profit) |
| 2014 | 1, 40,000(profit) |
| 2015 | 2,30,000(note) |
| 2016 | 2, 80,000(profit) |
| 2017 | 2, 40,000(loss) |
| Total profit | 4,70,000 |
average profit: 4, 70,000/5
94000
goodwill = average profit × number of year's purchase
94000 × 4
376000
note: profit of 2015 : 2, 00,000 + 40,000 - (25℅ of 40,000)
2, 40,000 - 10,000
2, 30,000
In 2015, moped costing Rs 40,000 was purchased at it was wrongly debited to travelling expense account. After rectification the profit of 2015 will be increase. Depreciation on moped Rs 10,000 was not charged to profit and loss account of 2015.