Average Profit Method
1. Goodwill is to be valued at three years’ purchase of four years’ average profit. Profits of the form

2 thoughts on “Average Profit Method<br />1. Goodwill is to be valued at three years’ purchase of four years’ average profit. Profits of the form”

1. Answer:

   Good will = Average profit × Number of year’s purchase

   Average profit = Total profit for past given year’s/ year

   12000+18000 16000+14000 / 4

   = 60000 / 4 = 15000

   Number of years purchase = 3

   Goodwill = 15000 × 3 = 45000

   Good Night Shivangi

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2. Answer:

   hii friend

   good evening

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