1. The firm’s average profit before charging partner’s remuneration was Rs. 25,000. Total investment of the partners in a firm was Rs. 80,000. Rate of return in similar business was 20%. Partner’s remuneration was Rs. 5,000. Goodwill to be valued at two year’s purchase of super profit. Find out value of goodwill. [Ans.]
3. Mona, Reena and Sona have been carrying on a partnership business and good will of their firm is to be valued at three years purchase of the average profit for the last five years. The profit and losses for the last five years have been. 1^{st} Year Rs. 16,000, 2^{nd} Year, 15,000, 3^{rd} Year, 8,000(Loss), 4^{th} Year, 7,000, 5^{th} Year, 10,000. [Ans.]
4. Calculate the good will from the following information goodwill is valued at three years purchase of average profit of the last six years. Profit and losses of the business in the last six years are as follows, [Ans]
5. Calculate the value of goodwill according to average profit method. Goodwill is valued at three years purchase of last four year average profit. The profits and losses for the last four years are. [Ans.]
1^{st} Year Rs,

10,000(Profit)

2^{nd} Year Rs,

12,000(Profit)

3^{rd} Year Rs,

4,000(Loss)

4^{th} Year Rs,

18,000(Profit)

1991

Rs, 40,000

1992

Rs, 45,000

1993

Rs, 55,000

1994

Rs, 53,000

Homework Sums [Try it Yourself]