The total capital of the firm of Saurabh, Mohit and Nikhil was Rs. 1,00,000. The net profits for the last 3 years were : 2013-14 Rs. 40,000, 2014-15 Rsd. 46,000 and 2015-16 Rs. 52,000. There was an abnormal loss of Rs. 3,000 in 2014-15. Goodwill of the firm was to be valued at 2 years purchase of the average profits of the last three years. Calculate the goodwill of the firm.

Explanation

Total Profits of last 3 years :
`{:(,,"Rs."),(2013-14,,"40,000"),("2014-15 (Rs. 46,000 + Abnormal Loss Rs. 3,000",,"49,000"),(2015-16,,"52,000"),(,,bar ul ul("1,41,000")):}`
Average Profit = Rs. 1,41,000 `div` 3 = Rs. 47,000
Goodwill = Average Profit `xx` Number of year's Purchase
= Rs. 47,000 `xx` 2 = Rs. 94,000