The profits and losses of a firm for the last four years were as follows:
2015: Rs. 15,000; 2016: Rs. 17,000; 2017: Rs. 6,000 (Loss); 2018: Rs. 14,000
You are required to calculate the amount of goodwill on the basis of 5 years purchase of average profits of the last 4 years.

A partnership firm has decided to value its goodwill for the purpose of settling a retiring partner. The profits of that firm for the last four years were as follows:
2015: Rs. 40,000; 2016: Rs. 50,000; 2017: Rs. 48,000 and 2018: Rs. 46,000
The business was looked after by a partner. No remuneration was paid to him. The fair remuneration of the partner valued at comes to Rs. 6,000 per annum.
Find out the value of goodwill, if it is valued on the basis of three years purchase of the average profits of the last four years

From the following information relating to Arul enterprises, calculate the value of goodwill on the basis of 2 years purchase of the average profits of 3 years.
(a) Profits for the years ending 31^st December 2016, 2017 and 2018 were Rs. 46,000, Rs. 44,000 and Rs. 50,000 respectively.
(b) A non-recurring income of Rs. 5,000 is included in the profits of the year 2016.
(c) The closing stock of the year 2017 was overvalued by Rs. 10,000.

The following particulars are available in respect of a business carried on by a partnership firm:
(a) Profits earned: 2016: Rs. 30,000; 2017: Rs. 29,000 and 2018: Rs. 32,000.
(b) Profit of 2016 includes a non-recurring income of Rs. 3,000.
(c) Profit of 2017 is reduced by Rs. 2,000 due to stock destroyed by fire.
(d) The stock is not insured. But, it is decided to insure the stock in future. The insurance premium is estimated at Rs. 5,600 per annum.
You are required to calculate the value of goodwill on the basis of 2 years purchase of average profits of the last three years.

From the following information relating to a partnership firm, find out the value of its goodwill based on 3 years purchase of average profits of the last 4 years:
(a) Profits of the years 2015, 2016, 2017 and 2018 are Rs. 10,000, Rs. 12,500, Rs. 12,000 and Rs. 11,500 respectively.
(b) The business was looked after by a partner and his fair remuneration amounts to Rs. 1,500 per year. This amount was not considered in the calculation of the above profits.

From the following information relating to Sridevi enterprises, calculate the value of goodwill on the basis of 4 years purchase of the average profits of 3 years.
(a) Profits for the years ending 31st December 2016, 2017 and 2018 were Rs. 1,75,000, Rs. 1,50,000 and Rs. 2,00,000 respectively.
(b) A non-recurring income of Rs. 45,000 is included in the profits of the year 2016.
(c) The closing stock of the year 2017 was overvalued by Rs. 30,000.

How is goodwill calculated under the super profits method?

How is the value of goodwill calculated under the capitalisation method?

Find out the value of goodwill at three years purchase of weighted average profit of last four year.

Purchase of super profit method.

A partnership firm earned net profits during the last three years as follows:
2016 : Rs. 20,000; 2017 : Rs. 17,000 and 2018 : Rs. 23,000
The capital investment of the firm throughout the above mentioned period has been Rs. 80,000. Having regard to the risk involved, 15% is considered to be a fair return on capital employed in the business. Calculate the value of goodwill on the basis of 2 years purchase of super profit.

From the following information, find out the value of goodwill by capitalisation method:
(i) Average profit Rs. 20,000
(ii) Normal rate of return 10%
(iii) Capital employed Rs. 1,50,000