Use the following information to answer the question belowMr White acquired Mr Black's business for GH¢ 410,000. The total assets were GH¢ 670,000 and liabilities amounted to GH¢ 320,000.
The double entry to record the good will in the books is debit
The double entry to record the good will in the books is debit
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Correct Answer: Option B
Explanation:
Goodwill is the established reputation of a business regarded as a quantifiable asset and calculated as part of its value when it is sold. In order to calculate goodwill, the fair market value of identifiable assets and liabilities of the company acquired is deducted from the purchase price.
Goodwill is the established reputation of a business regarded as a quantifiable asset and calculated as part of its value when it is sold. In order to calculate goodwill, the fair market value of identifiable assets and liabilities of the company acquired is deducted from the purchase price.