Q9.Bharat and Bhushan are partners sharing profits in the ratio of 3 : 2. They decided to admit Manu as a partner from 1st April, 2019 on the following terms:

i

Manu will be given 2/5th share of the profit.

ii

Goodwill of the firm will be valued at two years' purchase of three years' normal average profit of the firm. Profits of the previous three years ended 31st March, were:

2019 - Profit  30,000 afterdebitinglossofstockbyfire 40, 000

.

2018 - Loss 80,000 includesvoluntaryretirementcompensationpaid 1, 10, 000

.

2017 - Profit 1,10,000 includingagain(profit

of 30,000 on the sale of fixed assets). Calculate the value of goodwill.