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    Question

    X Ltd. is absorbed by Y Ltd. Purchase consideration =

    ₹10,00,000. Assets taken over = ₹12,00,000, Liabilities = ₹3,00,000. What is the goodwill or capital reserve arising?
    A Goodwill ₹1,00,000 Correct Answer Incorrect Answer
    B Capital Reserve ₹1,00,000 Correct Answer Incorrect Answer
    C Goodwill ₹2,00,000 Correct Answer Incorrect Answer
    D Capital Reserve ₹1,00,000 Correct Answer Incorrect Answer
    E Nil Correct Answer Incorrect Answer

    Solution

    Net Assets = 12,00,000 – 3,00,000 = 9,00,000. PC = 10,00,000 → excess payment = 1,00,000 → Capital Reserve.

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