# Goodwill valuation - Accountancy

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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.

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