Varun Ltd., purchased building worth Rs. 1,50,000, machinery worth Rs. 1,40,000 and furniture worth Rs. 10,000 from Anuj Ltd., and took over its liabilities of Rs. 20,000 for a purchase consideration of Rs. 3,15,000. Varun Ltd., paid the purchase consideration by issuing 12% debentures of Rs. 100 each at a premium of 5%. What will be the amount of goodwill in this case?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Rs. 35,000
When the purchase consideration is more than the net assets taken over, the excess is paid for the business’s reputation, that is, goodwill.
Assets taken over = Rs. 1,50,000 + Rs. 1,40,000 + Rs. 10,000 = Rs. 3,00,000
Net assets = Rs. 3,00,000 − Rs. 20,000 (liabilities) = Rs. 2,80,000
Goodwill = Rs. 3,15,000 − Rs. 2,80,000 = Rs. 35,000
The 12% debentures at a 5% premium only decide how the Rs. 3,15,000 is paid (3,000 debentures at Rs. 105); they do not change the goodwill.
Note: This question is from NCERT (2026-27). NTA sets numerical questions from NCERT too, so do not ignore NCERT while practising numericals.
NCERT (2026-27 edition):
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