Use the information below to answer this question.
Dangote acquired Dantata’s business for N350,000. The total asset work were N820,000 and liabilities amounted to N 640,000
The double entry to record the goodwill in the books is debt
Dangote acquired Dantata’s business for N350,000. The total asset work were N820,000 and liabilities amounted to N 640,000
The double entry to record the goodwill in the books is debt
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Correct Answer: Option B
Explanation:
when there is excess of purchase consideration over net assets, the accounting entries is to debit goodwill account as the receiving account and credit purchase of business account as the giving account.
when there is excess of purchase consideration over net assets, the accounting entries is to debit goodwill account as the receiving account and credit purchase of business account as the giving account.