UPSC Exam > UPSC Questions > Goodwill Co. Ltd took over the assets Rs. 1,7...
Start Learning for Free
Goodwill Co. Ltd took over the assets Rs. 1,75,000 and liabilities of Rs. 15,000 of Raj and Co. for the purchase consideration of Rs. 1,65,000. Goodwill Co. Ltd. paid the purchase consideration by issuing debenture of Rs. 100 each at a premium of 10%. Give journal entries.?
Most Upvoted Answer
Goodwill Co. Ltd took over the assets Rs. 1,75,000 and liabilities of ...
Journal Entries for Goodwill Co. Ltd.
When Goodwill Co. Ltd. acquires assets and liabilities from Raj and Co., it needs to record the transaction through journal entries. Here’s how it would be done:
1. Entry for Acquisition of Assets and Liabilities
- Debit: Assets Taken Over (e.g., Fixed Assets, Inventory) Rs. 1,75,000
- Credit: Liabilities Taken Over Rs. 15,000
- Credit: Purchase Consideration (to Raj and Co.) Rs. 1,65,000
2. Calculation of Goodwill
- Assets: Rs. 1,75,000
- Liabilities: Rs. 15,000
- Net Assets: Rs. 1,75,000 - Rs. 15,000 = Rs. 1,60,000
- Goodwill: Purchase Consideration - Net Assets
- Goodwill = Rs. 1,65,000 - Rs. 1,60,000 = Rs. 5,000
3. Entry for Goodwill
- Debit: Goodwill Rs. 5,000
- Credit: Purchase Consideration Rs. 5,000
4. Entry for Issuing Debentures
- Debit: Purchase Consideration Rs. 1,65,000
- Credit: Debentures Rs. 1,50,000 (1,500 debentures at Rs. 100 each)
- Credit: Securities Premium Rs. 15,000 (10% of Rs. 1,50,000)
Summary
- Goodwill Co. Ltd. records the total assets and liabilities taken over.
- The purchase consideration is settled through issued debentures, reflecting both the liability and premium associated with them.
- This process ensures clear financial representation of the acquisition in the company’s books.
These journal entries reflect a comprehensive accounting process for the acquisition.
When Goodwill Co. Ltd. acquires assets and liabilities from Raj and Co., it needs to record the transaction through journal entries. Here’s how it would be done:
1. Entry for Acquisition of Assets and Liabilities
- Debit: Assets Taken Over (e.g., Fixed Assets, Inventory) Rs. 1,75,000
- Credit: Liabilities Taken Over Rs. 15,000
- Credit: Purchase Consideration (to Raj and Co.) Rs. 1,65,000
2. Calculation of Goodwill
- Assets: Rs. 1,75,000
- Liabilities: Rs. 15,000
- Net Assets: Rs. 1,75,000 - Rs. 15,000 = Rs. 1,60,000
- Goodwill: Purchase Consideration - Net Assets
- Goodwill = Rs. 1,65,000 - Rs. 1,60,000 = Rs. 5,000
3. Entry for Goodwill
- Debit: Goodwill Rs. 5,000
- Credit: Purchase Consideration Rs. 5,000
4. Entry for Issuing Debentures
- Debit: Purchase Consideration Rs. 1,65,000
- Credit: Debentures Rs. 1,50,000 (1,500 debentures at Rs. 100 each)
- Credit: Securities Premium Rs. 15,000 (10% of Rs. 1,50,000)
Summary
- Goodwill Co. Ltd. records the total assets and liabilities taken over.
- The purchase consideration is settled through issued debentures, reflecting both the liability and premium associated with them.
- This process ensures clear financial representation of the acquisition in the company’s books.
These journal entries reflect a comprehensive accounting process for the acquisition.
Attention UPSC Students!
To make sure you are not studying endlessly, EduRev has designed UPSC study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in UPSC.
|
Explore Courses for UPSC exam
|
|
Top Courses for UPSCView all
Goodwill Co. Ltd took over the assets Rs. 1,75,000 and liabilities of Rs. 15,000 of Raj and Co. for the purchase consideration of Rs. 1,65,000. Goodwill Co. Ltd. paid the purchase consideration by issuing debenture of Rs. 100 each at a premium of 10%. Give journal entries.?
Question Description
Goodwill Co. Ltd took over the assets Rs. 1,75,000 and liabilities of Rs. 15,000 of Raj and Co. for the purchase consideration of Rs. 1,65,000. Goodwill Co. Ltd. paid the purchase consideration by issuing debenture of Rs. 100 each at a premium of 10%. Give journal entries.? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Goodwill Co. Ltd took over the assets Rs. 1,75,000 and liabilities of Rs. 15,000 of Raj and Co. for the purchase consideration of Rs. 1,65,000. Goodwill Co. Ltd. paid the purchase consideration by issuing debenture of Rs. 100 each at a premium of 10%. Give journal entries.? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Goodwill Co. Ltd took over the assets Rs. 1,75,000 and liabilities of Rs. 15,000 of Raj and Co. for the purchase consideration of Rs. 1,65,000. Goodwill Co. Ltd. paid the purchase consideration by issuing debenture of Rs. 100 each at a premium of 10%. Give journal entries.?.
Goodwill Co. Ltd took over the assets Rs. 1,75,000 and liabilities of Rs. 15,000 of Raj and Co. for the purchase consideration of Rs. 1,65,000. Goodwill Co. Ltd. paid the purchase consideration by issuing debenture of Rs. 100 each at a premium of 10%. Give journal entries.? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Goodwill Co. Ltd took over the assets Rs. 1,75,000 and liabilities of Rs. 15,000 of Raj and Co. for the purchase consideration of Rs. 1,65,000. Goodwill Co. Ltd. paid the purchase consideration by issuing debenture of Rs. 100 each at a premium of 10%. Give journal entries.? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Goodwill Co. Ltd took over the assets Rs. 1,75,000 and liabilities of Rs. 15,000 of Raj and Co. for the purchase consideration of Rs. 1,65,000. Goodwill Co. Ltd. paid the purchase consideration by issuing debenture of Rs. 100 each at a premium of 10%. Give journal entries.?.
Solutions for Goodwill Co. Ltd took over the assets Rs. 1,75,000 and liabilities of Rs. 15,000 of Raj and Co. for the purchase consideration of Rs. 1,65,000. Goodwill Co. Ltd. paid the purchase consideration by issuing debenture of Rs. 100 each at a premium of 10%. Give journal entries.? in English & in Hindi are available as part of our courses for UPSC.
Download more important topics, notes, lectures and mock test series for UPSC Exam by signing up for free.
Here you can find the meaning of Goodwill Co. Ltd took over the assets Rs. 1,75,000 and liabilities of Rs. 15,000 of Raj and Co. for the purchase consideration of Rs. 1,65,000. Goodwill Co. Ltd. paid the purchase consideration by issuing debenture of Rs. 100 each at a premium of 10%. Give journal entries.? defined & explained in the simplest way possible. Besides giving the explanation of
Goodwill Co. Ltd took over the assets Rs. 1,75,000 and liabilities of Rs. 15,000 of Raj and Co. for the purchase consideration of Rs. 1,65,000. Goodwill Co. Ltd. paid the purchase consideration by issuing debenture of Rs. 100 each at a premium of 10%. Give journal entries.?, a detailed solution for Goodwill Co. Ltd took over the assets Rs. 1,75,000 and liabilities of Rs. 15,000 of Raj and Co. for the purchase consideration of Rs. 1,65,000. Goodwill Co. Ltd. paid the purchase consideration by issuing debenture of Rs. 100 each at a premium of 10%. Give journal entries.? has been provided alongside types of Goodwill Co. Ltd took over the assets Rs. 1,75,000 and liabilities of Rs. 15,000 of Raj and Co. for the purchase consideration of Rs. 1,65,000. Goodwill Co. Ltd. paid the purchase consideration by issuing debenture of Rs. 100 each at a premium of 10%. Give journal entries.? theory, EduRev gives you an
ample number of questions to practice Goodwill Co. Ltd took over the assets Rs. 1,75,000 and liabilities of Rs. 15,000 of Raj and Co. for the purchase consideration of Rs. 1,65,000. Goodwill Co. Ltd. paid the purchase consideration by issuing debenture of Rs. 100 each at a premium of 10%. Give journal entries.? tests, examples and also practice UPSC tests.
|
|
Explore Courses for UPSC exam
|
|
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup