Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Accounting for Partnership

Question:

The profits of firm for the five years are as follows:

Year

Profit (Rs.)

2012-13

20,000

2013-14

24,000

2014-15

20,000

2015-16

20,000

2016-17

16,000

Calculate the value of goodwill on the basis of three years' purchase of average profits.

Options:

Rs. 20,000

Rs. 40,000

Rs. 60,000

Rs. 70,000

Correct Answer:

Rs. 60,000

Explanation:

The correct answer is Option (3) → Rs. 60,000