[ISC] Q. 14 Goodwill Solution TS Grewal Class 12 (2024-25)

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Solution to Question number 14 of the Goodwill chapter 2 TS Grewal Book ISC Board 2024-25 Edition.

Calculate the goodwill of a firm on the basis of three year’s purchase of the weighted average profit of the last four financial years. The appropriate weights to be used and profits are:

YearProfits (₹)
2020 – 211,01,000
2021 – 221,24,000
2022 – 231,00,000
2023 – 241,40,000

On a scrutiny of the accounts, the following information was taken:

i) On 1st December, 2022, a major repair was made in respect of the plant incurring ₹ 30,000 which was charged to revenue. The said sum is agreed to be capitalised for goodwill calculation subject to adjustment of depreciation of 10% p.a. on Reducing Balance Method.

ii) The closing stock for the year ended 31st March, 2022 was overvalued by ₹ 12,000.

iii) To cover management cost, an annual charge of ₹ 24,000 should be made for the purpose of goodwill valuation.

iv) On 1st April 2021, a machine having a book value of ₹ 10,000 was sold for ₹ 11,000 but the proceeds were wrongly credited to Profit & Loss Account. No effect has been given to rectify the same. Depreciation is charged on machine @ 10% p.a. on Reducing balance Method.

Solution:-

List of all solutions of Goodwill chapter TS Grewal ISC Board class 12 (2024-25)

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1Question – 1
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5Question – 5
6Question – 6
7Question – 7
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11Question – 11
12Question – 12
13Question – 13
14Question – 14
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16Question – 16
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19Question – 19
20Question – 20
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21Question – 21
22Question – 22
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24Question – 24
25Question – 25
26Question – 26
27Question – 27
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30Question – 30
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31Question – 31
32Question – 32
33Question – 33
34Question – 34
35Question – 35
36Question – 36
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