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Past average profit is Rs. 20,000 and is expected to last three more years. Goodwill?
ARs. 20,000
BRs. 1,20,000
CRs. 80,000
DRs. 60,000
Answer & Solution
Correct answer: D. Rs. 60,000
Under the average profits method goodwill is average profit times years' purchase, which is 20,000 multiplied by 3.
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