Sarthaks Test
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A and B are partners sharing profits and losses in the ratio of 5:3. On 1st April, 2016, C is admit the partnership for 1/4th share of profits. For this purpose, goodwill is to be valued at two purchases of last three years’ profits (after allowing partners’ remuneration). Profits to be weightier 1:2:3, the greatest weight being given to last year. Net profit before partners’ remuneration 2013-14: Rs.2,00,000; 2014-15: Rs.2,30,000; 2015-16: Rs.2,50,000. The remuneration of the part estimated to be Rs.90,000 p.a. Calculate amount of goodwill.

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= 1,45,000 x 2

= 2,90,000

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