Incomplete Records 2003 (H)

NADA

Can somebody please tell me how you work out the Goodwill and stuff at the very start of the question. Thanks in advance.

fatal

add your list of assets and liabilities usually only.however the trick here is that you borrowed more money that was required to purchase the business....

List the assets and liabilities that are in the top paragraph ONLY and intoliabilities add how much you borrowed(the total) and into assets add a "bank" figure of the difference between how much you borrowed and how much the business cost...then simply add up the assets and liabilities separately and take the assets from the liabilities to get your goodwill

MB44

Assets - Liabilities - Purchase Price.
2003 Q 7
290000+16700+2400+32500-3600-58000-320000 = 40000 Goodwill

As Mark has done it, just include the purchase price as a liability.

Add up Assets.
- Liabilities(including purchase Price)
= Goodwill

If it states that "he lodged 350,000 into a business bank account, and used 295,000 of that to buy a business" then use the amount lodged as Capital in your balance sheet.