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Give the formula used for calculating goodwill of a partnership firm by the Weighted Average Profit Method. - Accounts

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प्रश्न

Give the formula used for calculating goodwill of a partnership firm by the Weighted Average Profit Method.

संक्षेप में उत्तर

उत्तर

The formula used for calculating goodwill of a partnership firm by the weighted average profit method is:

Weighted Average Profit = `"Total of Products of Profits"/"Total of Weights"`

Goodwill = Weighted Average Profit × Number of Year's Purchase

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Weighted Average Method
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