Rambo Ltd. took over Assets of 28,00,000 and Liabilities of ₹3,50,000 from Amber Ltd. and issued them 30,000, 12% debenture of 100 each at 10% discount. Determine the amount of Goodwill or capital reserve.

Goodwill ₹2,50,000

The correct answer is option 2- Goodwill ₹2,50,000.

Assets = 28,00,000
Liabilities = ₹3,50,000

30,000, 12% debenture of 100 each at 10% discount.
Issue price = 100- 10
                 = 90

Purchase consideration = 30,000 x 90
                                  = 27,00,000

Assets = Liability + purchase consideration
28,00,000 = 3,50,000  + 27,00,000
28,00,000 = 30,50,000

As liability side is more than assets side so balancing figure on the assets side is goodwill.
Goodwill = 30,50,000 - 28,00,000
             = 2,50,000