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Question : Prakash Ltd. purchased assets worth Rs.2,20,000 and also took over the liabilities (creditors) of Rs.40,000 of Ajay Ltd. for a purchase consideration of Rs. 1,92,000. Prakash Ltd. paid the purchase consideration by issuing 12% debentures of Rs.100 each at premium of 20%.

Difference between purchase consideration and Net Assets are debited/credited to

 

Option 1: Debited to goodwill account by Rs 12,000

Option 2: Credited to capital reserve account by Rs 12,000

Option 3: Debited to profit and loss account Rs 12,000

Option 4: Credited to General reserve Rs 12000


Team Careers360 19th Jan, 2024
Answer (1)
Team Careers360 21st Jan, 2024

Correct Answer: Debited to goodwill account by Rs 12,000


Solution : Answer = Debited to goodwill account by Rs 12,000

Goodwill = 1,92,000 - 1,80,000

= Rs 12000
Hence, the correct option is 1.

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