Manbir and Nimrat are partners and they admit Anahat into partnership. It was agreed to value goodwill at three tears purchase on Weighted Average Profit Method taking profits of last five years. Weights assigned to each year as 1, 2, 3, 4 and 5 respectively to profit for the year ended 31st March, 2014 to 2108. The profit for these years were: Rs. 70,000, Rs.1,40,000, Rs. 1,00,000, Rs. 1,60,000 and Rs. 1,65,000 respectively. Scrutiny of books of account revealed following information:
(i) There was an abnormal loss of Rs. 20,000 in the year ended 31st March, 2014.
(ii) There was an abnormal gain (profit) of Rs 30,000 in the year ended 31st March, 2015.
(iii) Closing Stock as on 31st March, 2017 was overvalued by Rs. 10,000. Calculate the value of goodwill.
