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Question
If Xeno Ltd. acquired net assets of ₹ 20,00,000 against purchase consideration of ₹ 22,50,000, then the balance of ₹ 2,50,000 will be debited to ______.
Options
Capital Reserve Account.
Goodwill Account.
Reserve Capital Account.
Statement of Profit & Loss.
MCQ
Fill in the Blanks
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Solution
If Xeno Ltd. acquired net assets of ₹ 20,00,000 against purchase consideration of ₹ 22,50,000, then the balance of ₹ 2,50,000 will be debited to Goodwill Account.
Explanation:
When Purchase Consideration is more than the value of net assets acquired, the difference represents Goodwill.
₹ 22,50,000 − ₹ 20,00,000 = ₹ 2,50,000
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