In a partnership firm, there are 3 partners and want to admit 4th partner. For this purpose, they valued goodwill of the firm with the following information. Calculate goodwill of the firm if it is to be calculated on the basis of 4 years purchase of average profit of the last 5 years?
Last 5 years profit is: 2015 - ₹150000
2016- ₹350000
2017- ₹500000
2018- ₹710000
2019 -(₹590000)
In April 2018, car purchased of ₹100000 debited to repairs account on which depreciation is to be charged @ 25% p.a.
Profit of the year 2018 & 2019 include ₹10000 of income from non-trade investments.

₹940000

Profit of 2018= 710000 - 10000 (income from non-trade investments) = 700000
Profit of 2019 - (590000) - 10000 (income from non-trade investments) +100000(cost of car) -25000 (depreciation on car 100000*25/100) = (525000)
Average profit = (150000+350000+500000+ 700000 - 525000) / 5 = 1175000/5 = 235000
GOODWILL = 235000* 4 = ₹940000