question_answer

Hari and Krishan were partners sharing profits and losses in the ratio of 2 : 1. They admitted Shyam as a partner for 1/5th share in the profits. For this purpose, the Goodwill of the firm was to be valued on the basis of three years' purchase of last five years average profits. The profits for the last five years were :

Year 2013-14 2014-15 2015-16 2016-17 2017-18 Profit 50,000 40,000 75,000 (25,000) 50,000

The profit of 2014 - 15 was calculated after charging Rs. 10,000 for abnormal loss of goods by fire.

Goodwill of the firm:

 

A) 1,00,000

B) 1,10,000

C) 1,20,000

D) 1,30,000