Post a New Question

Goodwill valuation - Accountancy

posted by .

In case of Admission:

Given a balance sheet as at 31 Dec 2008. The new partner was admitted on 1 Jan 2009.

Goodwill was agreed at 2 years purchase and was to be valued in accorfance to the weighted average gross profit method for the previous four years starting from this year.

Year 2005 - 6,000,000 Weight - 1
Year 2006 - 3,600,000 Weight - 3
Year 2007 - 8,400,000 Weight - 2
Year 2008 - 12,000,000 Weight - 3
Year 2009 - 10,000,000 Weight - 2

Req- Ascertain the amount of goodwill.

Question: will the average product be taken from 2005 - 2008 (4 years) or 2007 - 2009 (4 years)...the b/sheet date is 2008, admission date is 2009.

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. to record admission of new partner into partnershi

    I was just wondering if anyone could help me with the following problem. I am not sure even where to start. Reed, Sharp, and Tucker were partners with capital account balances of $80,000, $100,000, and $70,000, respectively. They agreed …
  2. Math

    John invests $100,000 in a newly issued 3 year bond. The bond is issued at par on 1 Jan 2007.The coupon rate is 4%. Interest is paid on each 30 Jun and 31 Dec. On 1 Jan 2008, John finds that the stock market provides better return. …
  3. Accounting

    Please Help. I can't get the balance sheet to balance out at at. I am frustrated! Prepare a Trial Balance, an Income Statement and a Balance Sheet. Doris' Custom Designs Jan. 1 Doris deposits $10,000 in the bank to start her business. …
  4. Goodwill Valuation 2 - Accountancy

    In case of Admission: Given a balance sheet as at 31 Dec 2007. The new partner was admitted on 1 Jan 2007. Goodwill was agreed at 2 years purchase and was to be valued in accordance to the weighted average gross profit method for the …
  5. Mergers and Acquisitions

    Fair value determination of goodwill and calculating the premium paid over market value in a merger: Using fair value accounting for goodwill, under FAS 141R, determine the amount of Goodwill that "the acquiring company" enters on …
  6. accounts

    The differences between the book basis and tax basis of the assets and liabilities of Castle Corporation at the end of 2008 are presented below.  It is estimated that the litigation liability will be settled in 2009. The difference …
  7. accounting

    The goodwill relates to the purchase of net assets comprising an operation. The recoverable amount of the goodwill at 30 June 2013 was $10,000.
  8. Economics

    Sometimes, a bidder on a work contract may bid lower than what would maximize his/her profit from the contract and the reason for that is to create goodwill (to increase expected future business from the buyer). How would you value …
  9. Economics

    Sometimes, a bidder on a work contract may bid lower than what would maximize his/her profit from the contract and the reason for that is to create goodwill (to increase expected future business from the buyer). How would you value …
  10. business

    . You've written a check to Goodwill Supply, and the check has been lost. What should you do?

More Similar Questions

Post a New Question