Day: October 11, 2022

A business is sold to a limited company.

The net assets acquired have a total book value of £90,000 and are valued at £100,000.

Goodwill is valued at £30,000.

The purchase price is settled by an issue of ordinary £1.00 shares, valued at £1.25 each.

How many shares are issued?

Select ONE answer:

1. 80,000
2. 96,000
3. 104,000
4. 130,000

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 3

1. Not correct
2. Not correct
3. Correct = £100,000 + £30,000 = £130,000 / £1.25 = = > 104,000 shares
4. Not correct

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