Accounting Multiple Choice Question – 15 August 2022

A limited company purchases a business by issuing 320 000 ordinary shares of £1.00 each at a premium of £0.75 per share.

Goodwill of £150 000 arises on the purchase.

What is the fair value of the separable net assets?

Select ONE answer:

1. £170 000
2. £410 000
3. £560 000
4. £710 000

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 – 320,000 * £1.75 – £150,000 = £410,000
3. Not correct
4. Not correct

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