Red and Blue, partners, are finalising accounts annually on 31 December, and report their performance as shown. Crimson was admitted to a fourth share of partnership profits on 1 September 2012. What will be the value of goodwill on that date using each of the following alternative formulae:

(a) Goodwill is to be valued at two year purchase of the average profit of the three years preceding the date of valuation

(b) Goodwill is to be valued at two year purchase of the average profit for the three years ending on the date of valuation

(c) Goodwill is to be valued at two year purchase of the average profit for the three years preceding the date of valuation, giving a weight to the first, second and the most recent of these years of 1:2:3 respectively

(d) Goodwill is to be valued at the capitalised amount at 16% per annum of the average annual profits for three years preceding the date of valuation

(e) Goodwill is to be valued at the capitalised value at 10% of the average super profit for three preceding years. Super profit is defined by the partners as the excess profit after taking into account a fair remuneration for services of both partners at £2,000 per month for each and a reasonable return at 6% per annum on the capital employed of £800,000.

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2009 Profit £267,000 2010 Loss £75,000 2011 Profit £324,000 2012 Profit £480,000