A and B are partners in a firm sharing profits and losses in the ratio of 2:1. On 1st April, 2017 they decided to admit C into partnership for 1/5th share in the profits. For this purpose, goodwill was valued at 80% of the average annual profits of the previous four years. The profits of the last four years were:
| Year Ending | Amount Rs. |
| 31.3.2014 | 1,67,000 |
| 31.3.2015 | 1,56,000 |
| 31.3.2016 | 1,92,000 |
| 31.3.2017 | (10,000) |
Calculate the value of goodwill of the firm and the amount of goodwill premium brought by C on his admission.
Marks-3, CBSE:2018-19/Main/03/Q-7
Answer :
