| Kabir and Farid are partners in a firm sharing profits in the ratio of 3:1 on 1-4-2019 they admitted Manik into partnership for 1/4th share in the profits of the firm. Manik brought his share of goodwill premium in cash. |
| Goodwill of the firm was valued on the basis of 2 years purchase of last three years average profits. The profits of last three years were : |
| 2016-17 ................................................................... 90,000 |
| 2017-18 ................................................................... 1,30,000 |
| 2018-19 .................................................................... 86,000 |
| During the year 2018-19 there was a loss of Rs. 20,000 due to fire which was not accounted for while calculating the profit. |
| Goodwill of the firm: |
A) 2,04,000
B) 2,00,000
C) 1,08,667
D) 1,02,000
Correct Answer: A
Solution :
2,04,000
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