| X and Y are partners. On 1st April, 2021 they decided to admit Z into partnership. For this purpose, goodwill was valued at 80% of the average annual profits of the previous four years. The profits of the last four years were; |
| 31.3.2018 ..................................................................................................................1,67,000 |
| 31.3.2019......................................................................................................................1,56,000 |
| 31.3.2020 .......................................................................................................1,92,000 |
| 31.3.2021.......................................................................................................................(10,000) |
| Value of Firm's goodwill: |
A) 1,01,000
B) 1,00,000
C) 90,000
D) 1,10,000
Correct Answer: A
Solution :
1,01,000
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