Question :
When Net Assets are more than Purchase Consideration. the excess of Net Assets over Purchase Consideration is credited to-----------------
Option 1: Goodwill account
Option 2: Capital reserve account
Option 3: Profit and loss account
Option 4: Vendor account
Correct Answer: Capital reserve account
Solution : Answer = Capital reserve account
When the net assets of a company exceed the purchase consideration paid during an acquisition, the excess amount is credited to the capital reserve account. This represents the surplus value gained by the acquiring company beyond the fair value of the acquired company's net assets, often reflecting intangible benefits or synergies. Hence, the correct option is 2.
When Purchase Consideration is more than Net Assets. the excess of Purchase Consideration over Net Assets is debited to --------------------
Exe Ltd. took over assets of Rs. 7,00,000 and liabilities of Rs. 60,000 of Wye Ltd. for the purchase consideration of Rs. 6,60,000. Exe Ltd. paid the purchase consideration by issuing 9% Debentures of Rs. 100 each at 10%
Question : If a company issues a fully paid share of Rs.1,25,000 in consideration of net assets of Rs.1,50,000 to a vendor. The Balance of Rs.25,000 will be credited to:
An increase in the value of assets at the time of retirement of a partner is
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
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