| ₦ | |
| Plant and Machinery | 190000 |
| Motor Vehicle | 170000 |
| Stock | 60000 |
| Current Liabilities | 50000 |
| Purchase consideration | 400000 |
A. ₦110 000
B. ₦ 80 000
C. ₦ 90 000
D. ₦ 30 000
Correct Answer:
Option D – ₦ 30 000
Explanation
| Assets | ₦ |
| Plant and Machinery | 190000 |
| Motor Vehicle | 170000 |
| Stock | 60000 |
| 420,000 | |
| Less Liabilities | 50000 |
| Value / Net worth of the business | 370,000 |
Purchase Consideration less worth of the business
400,000 – N 370,000
= N30,000
Goodwill is an asset that can not be seen or touched. It is referred to as an intangible asset.
Goodwill is generated as maybe the good name of the business, the confidence of the customers and the product of the business. It is quantifiable by the management and monetary terms.
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