Q4 dk goel class 12th J. X purchased the business of Y from 1st April, 2019. For this purpose
is to be valued at 1000/0 of the average annual profits of the last four years.
. profits shown by Fs business for the last four years were :
31st March, 2016 Profit I (after debiting loss of stock by fire
2017 Loss (includes voluntary retirement
compensation paid e 80,000)
Verification of books Of accounts revealed the following
(i) During the year ended 31 St March, 2017, a machine got destroyed in accident
and was written off as loss in Profit & Loss Account.
(ii) On 1st July 2017, Two Computers costing R40,OOO each were purchased and
were debited to Travelling Expenses Account on which depreciation is to be
charged@ 10% p.a. on Straight Line Method.
Calculate the value of goodwill.