Read the following information and answer the question.

A and B are partners sharing profits equally. They admit C into partnership for equal share with a guaranteed profit of ₹20,000 per year. The books of the firm revealed following information-
Profits of the last 4 years is:
2016- ₹70,000
2017- ₹1,00,000
2018- ₹55,000 (loss)
2019- ₹1,45,000

What is goodwill of the firm if it is calculated at 2 years purchase of average profit of last 4 years?

₹1,30,000

The correct answer is option 2- ₹1,30,000.

TOTAL PROFIT = 70,000 + 1,00,000 - 55,000 + 1,45,000
                       = ₹2,60,000

AVERAGE PROFIT = 2,60,000/4
                           = ₹65,000

GOODWILL = Average profits x No of years purchase
                  = 65,000 x 2
                  = ₹1,30,000