[CBSE] DK Goel Q. 5 Change in Profit Sharing Ratio Solutions Class 12 (2024-25)

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Solution of Question 5 of Change in Profit sharing ratio DK Goel Class 12 CBSE (2024-25)

A, B and C are partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. They decide to take D into partnership for 1/4th share on 1st April, 2022. For this purpose, goodwill is to be valued at 3 times the average annual profits of the previous four or five years whichever is higher. The agreed profits for goodwill purpose of the past five years are as follows:

Year ending on 31st March 20181,30,000
Year ending on 31st March 20191,20,000
Year ending on 31st March 20201,50,000
Year ending on 31st March 20211,10,000
Year ending on 31st March 20222,00,000

Calculate the value of Goodwill.

[Ans. Goodwill ₹ 4,35,000.]

Solution:-

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