Sumit purchase Amit business on 1st April 2018. Goodwill was decided to be valued at 2 years. Purchase of average normal profit of last 4 years.
Profit for last 4 years:
2015 80,000
2016 1,45,000
2017 1,60,000
2018 2,00,000
1) abnormal loss of ?20,000 was debit to p&l a/c for the year ended 31st March 2015.
2) A fixed assets was sold in the year ended 31st March 2016 & gain ( profit) of ?25,000 was credited to p&l a/c.
3) In the year ended 31st March 2016 assets of the firm were not insured due to oversight. Insurance premium not paid was ?15,000.