Question

    X Ltd. and Y Ltd. amalgamate to form a new company Z

    Ltd. X Ltd.’s assets are ₹50 lakh, liabilities ₹20 lakh. Y Ltd.’s assets are ₹30 lakh, liabilities ₹10 lakh. Purchase consideration paid by Z Ltd. is ₹55 lakh. What is the goodwill or capital reserve?
    A Goodwill ₹5 lakh Correct Answer Incorrect Answer
    B Capital reserve ₹5 lakh Correct Answer Incorrect Answer
    C Goodwill ₹10 lakh Correct Answer Incorrect Answer
    D Capital reserve ₹10 lakh Correct Answer Incorrect Answer

    Solution

    Net Assets = (50–20) + (30–10) = ₹50 lakh Purchase consideration = ₹55 lakh ⇒ Goodwill = ₹5 lakh

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