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Q1. Compute goodwill / gain on bargain purchase. Select one: O A Goodwill $33,400 O B. Gain on bargain purchase $32,200 OC. Goodwill $32,200 O D. Gain on bargain purchase $33,400

Q1. Compute goodwill / gain on bargain purchase. Select one: O A Goodwill $33,400 O B. Gain on bargain purchase $32,200 OC. Goodwill $32,200 O D. Gain on bargain purchase $33,400

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On 1 January 2018, Bear Ltd purchased 100% of the shares of Panda Ltd for $180,000. At that date, the equity of Panda Ltd was as follows: Share capital Retained earnings Asset revaluation surplus $ 80,000 $ 60,000 $5,000 At 1 January 2018, the recorded amounts of Panda Ltd's assets and liabilities were equal to their fair values except inventory. At that date, carrying amount of inventory was $12,000 and fair value was $16,000. 60% of this inventory was sold by Panda Ltd in 2018. Tax rate is 30%. Q1. Compute goodwill / gain on bargain purchase. Select one: OA. Goodwill $33.400 O B. Gain on bargain purchase $32,200 OC. Goodwill $32,200 OD. Gain on bargain purchase $33,400
Transcribed Image Text:On 1 January 2018, Bear Ltd purchased 100% of the shares of Panda Ltd for $180,000. At that date, the equity of Panda Ltd was as follows: Share capital Retained earnings Asset revaluation surplus $ 80,000 $ 60,000 $5,000 At 1 January 2018, the recorded amounts of Panda Ltd's assets and liabilities were equal to their fair values except inventory. At that date, carrying amount of inventory was $12,000 and fair value was $16,000. 60% of this inventory was sold by Panda Ltd in 2018. Tax rate is 30%. Q1. Compute goodwill / gain on bargain purchase. Select one: OA. Goodwill $33.400 O B. Gain on bargain purchase $32,200 OC. Goodwill $32,200 OD. Gain on bargain purchase $33,400
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