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Two persons were sharing profits in the ratio of 3:2. They decided to admit chairman into the partnership for 1/6 th share of the future profits. Goodwill valued at 4 times the average super profits of the firm, was $18000. The firm had assets worth $1500000 and liabilities $1200000. The normal earning capacity of such firms is expected to be 10% p.a. Find the average profits/Actual profits earned by the firm during the last 4 years.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9966277

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