(begin{array}{c|c} & N \ hline text{Plant and Machinery} & 190 000 \ hline text{Motor Vehicle} & 170 000 \ hline text{Stock} & 60 000 \ hline text{Current Liabilities} & 50 000 \ hline text{Purchase consideration} & 400 000 end{array})
Determine the amount of goodwill
Determine the amount of goodwill
-
A.
₦110 000 -
B.
₦ 80 000 -
C.
₦ 90 000 -
D.
₦ 30 000
Correct Answer: Option D
Explanation
(begin{array}{c|c} text{Assets} & N \ hline text{Plant and Machinery} & 190 000 \ hline text{Motor Vehicle} & 170 000 \ hline text{Stock} & 60 000 \ hline & 420,000 \ hline text{Less Liabilities} & 50 000 \ hline text{Value / Net worth of the business} & 370,000end{array})
Purchase Consideration less worth of the business
400,000 – N 370,000
= N30,000
Goodwill is an asset that can not be seen or touched. It is referred to as intangible asset.
Goodwill is generated as may be the good name ot the business, confident of the customers an the product of the business. It is quantifiable by the management an monetary terms.