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Find the capitalized value. Posted by: Parmjeet on 02.09.2020 Swapnil T. from Mumbai
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The profits after adjustments will be (15,000),90,000 and 45,000 so the Average profit of 3years will be 40,000 and Goodwill will be 40,000 * 2 i.e. 80,000. Swapnil T. from Mumbai
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The profits after adjustments will be (15,000),90,000 and 45,000 so the Average profit of 3years will be 40,000 and Goodwill will be 40,000 * 2 i.e. 80,000. Swapnil T. from Mumbai
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The profits after adjustments will be (15,000),90,000 and 45,000 so the Average profit of 3years will be 40,000 and Goodwill will be 40,000 * 2 i.e. 80,000. Anbalagan from Chennai
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Table showing Adjusted Profit for the last 3 years.

2014      Net Profit as per P/L A/c.                                                        20,000

Less: Abnormal Gain (Insurance claims)                              (35,000)                (15,000)

2015     Net Loss as per P/L A/c.                                                        (15,000)

Add: Abnormal Loss (Retirement Compensation)                1,05,000                  90,000

2016     Net Profit as per P/L A/c.                                                         75,000

Less: Abnormal Gain (Profit on sale of Fixed Assets)           (30,000)                  45,000

Adjusted Total Profit of Last 3 Years (1,35,000 – 15,000)                             1,20,000

Average Profit =Total Profit of Last 3 Years / No of Years  = 1,20,000 / 3 = 40,000

Therefore Goodwill = Average profit   X  No of years of Purchase

= 40,000  X  2    = Rs. 80,000

Note:

(i) Abnormal Gain (Profit) should be Subtracted from the Net Profit or Net Loss.

(ii) Abnormal Loss should be Added with the Net Profit or Net Loss. Anbalagan from Chennai
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Table showing Adjusted Profit for the last 3 years.

2014      Net Profit as per P/L A/c.                                                        20,000

Less: Abnormal Gain (Insurance claims)                              (35,000)                (15,000)

2015     Net Loss as per P/L A/c.                                                        (15,000)

Add: Abnormal Loss (Retirement Compensation)                1,05,000                  90,000

2016     Net Profit as per P/L A/c.                                                         75,000

Less: Abnormal Gain (Profit on sale of Fixed Assets)           (30,000)                  45,000

Adjusted Total Profit of Last 3 Years (1,35,000 – 15,000)                             1,20,000

Average Profit =Total Profit of Last 3 Years / No of Years  = 1,20,000 / 3 = 40,000

Therefore Goodwill = Average profit   X  No of years of Purchase

= 40,000  X  2    = Rs. 80,000

Note:

(i) Abnormal Gain (Profit) should be Subtracted from the Net Profit or Net Loss.

(ii) Abnormal Loss should be Added with the Net Profit or Net Loss. Anbalagan from Chennai
• Like

Table showing Adjusted Profit for the last 3 years.

2014      Net Profit as per P/L A/c.                                                        20,000

Less: Abnormal Gain (Insurance claims)                              (35,000)                (15,000)

2015     Net Loss as per P/L A/c.                                                        (15,000)

Add: Abnormal Loss (Retirement Compensation)                1,05,000                  90,000

2016     Net Profit as per P/L A/c.                                                         75,000

Less: Abnormal Gain (Profit on sale of Fixed Assets)           (30,000)                  45,000

Adjusted Total Profit of Last 3 Years (1,35,000 – 15,000)                             1,20,000

Average Profit =Total Profit of Last 3 Years / No of Years  = 1,20,000 / 3 = 40,000

Therefore Goodwill = Average profit   X  No of years of Purchase

= 40,000  X  2    = Rs. 80,000

Note:

(i) Abnormal Gain (Profit) should be Subtracted from the Net Profit or Net Loss.

(ii) Abnormal Loss should be Added with the Net Profit or Net Loss. Anbalagan from Chennai
• Like

Table showing Adjusted Profit for the last 3 years.

2014               Net Profit as per P/L A/c.                                          20,000

Less: Abnormal Gain (Insurance claims)                 (35,000)                           (15,000)

2015               Net Loss as per P/L A/c.                                          (15,000)

Add: Abnormal Loss (Retirement Compensation)   1,05,000                             90,000

2016     Net Profit as per P/L A/c.                                                       75,000

Less: Abnormal Gain (Profit on sale of Fixed Assets)          (30,000)                            45,000

Adjusted Total Profit of Last 3 Years (1,35,000 – 15,000)                                           1,20,000

Average Profit =Total Profit of Last 3 Years / No of Years  = 1,20,000 / 3 = 40,000

Therefore Goodwill = Average profit   X  No of years of Purchase

= 40,000  X  2    = Rs. 80,000

Note:

(i) Abnormal Gain (Profit) should be Subtracted from the Net Profit or Net Loss.

(ii) Abnormal Loss should be Added with the Net Profit or Net Loss.

M
Muskan P. from Bhopal
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Muskan patel from Bhopal S
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Avg profit= Total Profit/no of years

=120000/3

=40000

Good will= Avg profit*no of years purchase

=40000*2

=80000 Meena N. from Noida
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