Normal Profit for the year ended 31st March,2017 :
= (Total Profit - Profit on sale of assets )
= ₹ ( 50,000 - 5,000) = ₹ 45,000.
Normal Profit for the year ended 31st March,2018 :
= ( Loss by fire - Total Loss )
= ₹ ( 20,000 - 30,000 ) = ₹ 10,000.
Normal Profits for the year ended 31st March,2019 :
= Rs. (Total Profit - Insurance claim received - Interest on investments and Dividend received)
= Rs. ( 70,000 - 18,000 - 8,000) = Rs. 44,000
Average Profits =
= Rs. 33,000
Goodwill = Average Profits of last three years x No. of Years of Purchase
Goodwill = Rs.( 33,000 x 2 ) = Rs. 66,000
Kanika's Share of Goodwill = Rs. ( 66,000 x 1/4) = Rs. 16,500.