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.

How much was paid for goodwill?

  • A GH¢ 350,000
  • B GH¢ 260,000
  • C GH¢ 90,000
  • D GH¢ 60,000
waec 2015accounting

The correct answer is D. GH¢ 60,000

Assets 670,000 - liabilities 320,000 = 350,000 (business value after liabilities claims)

Purchase price 410,000 - 350,000 business value =  60,000 goodwill

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