Accounting Multiple Choice Question – 7 February 2021

When the business of X was purchased by Y plc, negative Goodwill of £100,000 arose.

The following table shows an extract of X’s Balance Sheet at the purchase date.

What was the purchase price of X?

Select ONE answer:

1. £300,000
2. £500,000
3. £600,000
4. £700,000

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – £450k – £50k = £400k – £100k = £300k
2. Not correct
3. Not correct
4. Not correct

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