If H Ltd purchased 75% of the shares of S Ltd at a price of Rs 110,000, when S Ltd's share capital was Rs 60,000 and its accumulated profits amounted to Rs 80,000, what was the goodwill paid by H Ltd O a. Rs 5,000 O b. Rs 10,000 O c. Rs 15,000 d. None of the options

If H Ltd purchased 75% of the shares of S Ltd at a price of Rs 110,000, when S Ltd's share capital was Rs 60,000 and its accumulated profits amounted to Rs 80,000, what was the goodwill paid by H Ltd O a. Rs 5,000 O b. Rs 10,000 O c. Rs 15,000 d. None of the options

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

If H Ltd purchased 75% of the shares of S Ltd at a price of Rs 110,000, when S Ltd's share capital was Rs 60,000 and its accumulated profits amounted to Rs 80,000, what was the goodwill paid by H Ltd

O a. Rs 5,000

O b. Rs 10,000

O c. Rs 15,000

d. None of the options

Definition Definition Intangible asset that includes proprietary or intellectual property and brand value of a firm. Goodwill is recorded in the books when a firm purchases another firm and the purchase price is more than the fair value of net identifiable assets of the acquired business. The amount of goodwill is recorded on the asset side of the balance sheet (statement of financial position).

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