How much was paid for goodwill?

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.

A. GH¢ 350,000
B. GH¢ 260,000
C. GH¢ 90,000
D. GH¢ 60,000

Correct Answer: Option D

D. GH¢ 60,000

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