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Use the following information to answer the question below Mr White acquired Mr Black's business...

Accounts - Principles of Accounts
WAEC 2015

Use the following information to answer the question below

Mr White acquired Mr Black's business for GH¢ 410,000. The total assets were GH¢ 670,000 and liabilities amounted to GH¢ 320,000.

How much was paid for goodwill?

  • A. GH¢ 350,000
  • B. GH¢ 260,000
  • C. GH¢ 90,000
  • D. GH¢ 60,000
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Correct Answer: Option D
Explanation

Assets 670,000 - liabilities 320,000 = 350,000 (business value after liabilities claims)

Purchase price 410,000 - 350,000 business value =  60,000 goodwill

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Post-UTME Past Questions - Original materials are available here - Download PDF for your school of choice + 1 year SMS alerts
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Post-UTME Past Questions - Original materials are available here - Download PDF for your school of choice + 1 year SMS alerts
WAEC and NECO CBT Software for Computers and Laptops - Candidates, Schools, Centres, Resellers - 100% Offline -Download Now