Homework Answers
| Calculation of Goodwill | Value ($) | ||
| Assets Value | 5,70,000 | ||
| Benefit of tax for carry over loss | |||
| (400000*30%) | 1,20,000 | ||
| A | Total Assets Value | 6,90,000 | |
| B | Current Liabilities | 60,000 | |
| Net Assets value (A-B) | 6,30,000 | ||
| C | Cost of acquisition | 9,00,000 | |
| Goodwill (C-A) | 2,70,000 | ||
| Journal Entry | Dr | Cr | |
| $ | $ | ||
| Investment | 6,30,000 | ||
| Goodwill | 2,70,000 | ||
| Cash | 9,00,000 |
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