Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Problem 3: Goodwill calculation - Weighted Average Profits method] The trading profits of a company for the past 4 years were as follows: Year ended
Problem 3: Goodwill calculation - Weighted Average Profits method] The trading profits of a company for the past 4 years were as follows: Year ended Dec 31, 2015 - Dhs. 120,000: 2016 - Dhs. 136.000; 2017 - Dhs. 164.000: 2018 - Dhs. 172,000. Standard rate of return for this type of business is 8%. Calculate the value of goodwill at three years purchase of average super profits for the four years. Assume the weights assigned to profits are as follows: 2015: 1 2016: 1.5 2017: 2 2018: 2.5
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started