The Profits of firm for the last five years were as follows
Year |
Profits |
2002-03 |
20,000 |
2003-04 |
24,0000 |
2004-05 |
30,000 |
2005-06 |
25,000 |
2006-07 |
18,000 |
Calculate the value of goodwill on the basis of 3 year’s Purchase of weighted average profit based on weights 1, 2, 3, 4, & 5 respectively to the profits for 2002, 2003, 2004, 2005 and 2006.