Tarang purchased Jyoti’s business with effect from 1st April, 2026. Profits shown by Jyoti’s business for the last three financial years ended 31st March, were:

2024       :      Rs. 1,00,000 (including an abnormal gain of Rs. 12,500).

2025       :      Rs. 1,25,000 (after charging an abnormal loss of Rs. 25,000).

2026     :             Rs. 1,12,500 (excluding Rs. 12,500 as insurance premium on firm’s property – now to be insured). Calculate the value of firm’s goodwill on the basis of two years’ purchase of the average profit of the last three years.