Financial accounting The Goodwill is to be valued at two years' purchaseof the last four years' average profit. The profits wereR.O 40,000, R.O 32,000, R.O 15,000 and R.O 13,000respectively. Find out the value of goodwill.

Step 1: Calculate the Average Profit• Add the profits of the last four years.• Divide the total…

Answered: The Goodwill is to be valued at two…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 8PA: Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the...

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Calculate the amount of goodwill?
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The following details relate to M/s XYZ, a firm: Average profit of last four years = $7,00,000 Average capital employed by the firm: $55,00,000 Normal rate of return :10% Present value of annuity of $1 for 4 years @ 10% : 3.1699 Determine the value of goodwill on the basis of annuity of super profit.
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The Goodwill is to be valued at two years' purchase of the last four years' average profit. The profits were R.O 40,000, R.O 32,000, R.O 15,000 and R.O 13,000 respectively. Find out the value of goodwill.