Blue Prints Ltd. purchased a building worth Rs. 1,50,000 , Machinery worth Rs. 1,40,000 and Furniture worth Rs. 10,000 from XYZ Co. and took over its - Accountancy MCQ CUET Accountancy 2022 20 Aug Shift 2 2026 | ExamTest.live

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Blue Prints Ltd. purchased a building worth Rs. 1, 50, 000, Machinery worth Rs. 1, 40, 000 and Furniture worth Rs. 10, 000 from XYZ Co. and took over its liabilities of Rs. 20, 000 for a purchase consideration of Rs. 3, 15, 000 .Calculate the Goodwill/Capital Reserve to be recorded by Blue Print Ltd.

Solution & Step-by-step Explanation

Net Assets = Total Assets - Total Liabilities $ = (1, 50, 000 + 1, 40, 000 + 10, 000) - 20, 000 $ = 3, 00, 000 - 20, 000 = Rs. 2, 80, 000 Purchase Consideration = Rs. 3, 15, 000 .Since Purchase Consideration > Net Assets, the difference is Goodwill. Goodwill = 3, 15, 000 - 2, 80, 000 = Rs. 35, 000

Try it yourself before checking the explanation above.

Blue Prints Ltd. purchased a building worth Rs. 1, 50, 000, Machinery worth Rs. 1, 40, 000 and Furniture worth Rs. 10, 000 from XYZ Co. and took over its liabilities of Rs. 20, 000 for a purchase consideration of Rs. 3, 15, 000 .Calculate the Goodwill/Capital Reserve to be recorded by Blue Print Ltd.

Rs. 35, 000 Capital Reserve

Rs. 35, 000 Goodwill

Rs. 3, 15, 000 Goodwill

Rs. 55, 000 Goodwill

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