Day: March 23, 2023

Alex agrees to sell his business.

The value of the business being sold is shown.

• goodwill £32k
• fixed assets £100k
• current assets £60k
• current liabilities £12k

The purchase consideration is shares with a nominal value of £1, to be issued at a premium of £0.20.

How many shares will Alex receive?

Select ONE answer:

1. 150,000
2. 160,000
3. 170,000
4. 180,000

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 – £32k + £100k + £60k + £12k = £204k / £1.2 per share = 170,000 shares
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.