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Questions and Answers
What is the total profit of the firm for the five years ending 31st March?
What is the total profit of the firm for the five years ending 31st March?
₹ 21, 93, 000 (₹ 4, 00, 000 + ₹ 3, 98, 000 + ₹ 4, 50, 000 + ₹ 4, 45, 000 + ₹ 5, 00, 000)
What is the average profit of the firm for the five years?
What is the average profit of the firm for the five years?
₹ 4, 38, 600 (₹ 21, 93, 000 ÷ 5)
What is the goodwill of the firm on the basis of 4 Years' purchase of 5 years' average profit?
What is the goodwill of the firm on the basis of 4 Years' purchase of 5 years' average profit?
₹ 17, 54, 400 (₹ 4, 38, 600 x 4)
Who is the academic teacher mentioned in the passage?
Who is the academic teacher mentioned in the passage?
What is the medium through which Anurag Pathak provides free lectures?
What is the medium through which Anurag Pathak provides free lectures?
Flashcards
Five-year total profit
Five-year total profit
The sum of the firm's profits over five years.
Average annual profit
Average annual profit
The total profit divided by the number of years.
Goodwill calculation
Goodwill calculation
Value of a business above and beyond its tangible assets, calculated as 4 years' purchase of average profit
Academic teacher
Academic teacher
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Lecture distribution channel
Lecture distribution channel
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Study Notes
Goodwill Calculation
- Given profits for five years ending 31st March: • 2019: ₹ 4, 00, 000 • 2020: ₹ 3, 98, 000 • 2021: ₹ 4, 50, 000 • 2022: ₹ 4, 45, 000 • 2023: ₹ 5, 00, 000
Goodwill Calculation Method
- 4 Years' purchase of 5 years' average profit is used to calculate the goodwill of the firm.
Anurag Pathak's Background
- Anurag Pathak is an academic teacher with 18 years of experience teaching Accountancy and Economics to CBSE students.
- Thousands of students have secured good marks in their board exams under his guidance.
- He has a YouTube channel and a free Android & iOS app for lectures.
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Description
This quiz is based on the Goodwill chapter 2 of the TS Grewal Book CBSE Board 2023-24 Edition. It involves calculating the goodwill of a firm using the 4 years' purchase of 5 years' average profit method.
