Purchase Consideration of a business + Capital Reserve =
a) Net Assets of the business b) Goodwill
c) Consideration d) Total Assets of the Business
Answers
Solution :-D
Correct option is
B
Goodwill
Under Net assets method of purchase consideration , all assets are added and liabilities are deducted from the total of assets.
If any extra amount is paid against purchase consideration over and above the net assets, the balance amount is considered as payment for goodwill.
For example:
Plant & Machinery Rs.200000
Land & Building Rs.100000
Debtors Rs.50000
Stocks Rs.30000
---------------------
Total Assets Rs.380000
Less: Liabilities Rs.80000
--------------------
Net Assets Rs.300000
If purchase consideration is Rs.400000
Goodwill= Purchase Consideration-Net Assets
= Rs.400000−Rs.300000
Amount paid towards Goodwill is Rs.100000.
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Hope it's help you
Answer:
b
Explanation:
some time dealing needs under table money and is called good will money or black money or un accounted money.