Question

Pista Ltd. took over running business of Vista Ltd. comprising of Assets of ₹ 45,00,000 and Liabilities of ₹ 7,50,000 and in consideration issued them 30,000, 9% debentures of ₹ 100 each at 5% discount and a cheque of ₹ 10,00,000. Determine the amount of Goodwill or Capital Reserve.

विकल्प

• Goodwill ₹ 9,00,000

• Capital Reserve ₹ 9,00,000

• Goodwill ₹ 1,00,000

• Capital Reserve ₹ 1,00,000

Answer 1

Goodwill ₹ 1,00,000

Explanation:

Vista Ltd. is receiving:

30,000 debentures of ₹ 100 each at 5% discount.

Issue price per debenture:

= 100 – 5 

= ₹ 95

Total value:

= ₹ 30,000 × ₹ 95

= ₹ 28,50,000

Cheque payment = ₹ 10,00,000

Total Purchase Consideration:

PC = ₹ 28,50,000 + ₹ 10,00,000

= ₹ 38,50,000

Assets = ₹ 45,00,000

Liabilities = ₹ 7,50,000

Net Assets = ₹ 45,00,000 − ₹ 7,50,000

= ₹ 37,50,000

Since PC > Net Assets, the difference is Goodwill.

Goodwill = ₹ 38,50,000 − ₹ 37,50,000

= ₹ 1,00,000