Answer:
Working Notes:
1. Calculation of Goodwill brought in by Abhay:
Average Profits = (Normal profits from 31st March, 2016 to 31st March, 2019)/2
= ₹ (25,000 + 10,000 + 2,500 + 2,500)/4= ₹ 10,000
Goodwill = Average Profits × No. of years of Purchase
= ₹(10,000 × 2) = ₹ 20,000
Goodwill brought in by Abhay = ₹(20,000 × 1/4) = ₹ 5,000
2. Calculation of Revaluation Profit/Loss:
Debit side total = ₹ (3,000 + 4,000 + 2,500) = ₹ 9,500 Credit side total= ₹ 18,000 Gain on Revaluation = ₹ (18,000 – 9,500) = ₹ 8,500
Explanation: