Accounting Multiple Choice Question – 8 February 2021

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

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Y Ltd purchases the business of J Brown by issuing £1 shares at a premium of £0.20.

Y Ltd agrees to take over J Brown’s assets and liabilities at the date of the acquisition as follows.

Goodwill is valued at £10,000.

How many shares will J Brown receive from Y Ltd?

Select ONE answer:

  1. 158,000
  2. 175,000
  3. 200,000
  4. 210,000

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 2

  1. Not correct
  2. Correct – (£150k + £75k – £5K – £20k + £10k) ==> £210k / £1.20
  3. Not correct
  4. Not correct

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