A Ltd acquires all the net assets of B Ltd and applies the requirements of AASB 3 Business Combinations. Details regarding the net assets of B Ltd are as follows:

	Carrying amount	Fair value
	$	$
Assets
Cash	50,000	50,000
Furniture	20,000	15,000
Fittings	40,000	20,000
Accounts receivable	25,000	20,000
Goodwill	10,000	10,000
Liabilities
Accounts payable	20,000	20,000

Questions............ >>>>>>>>>>>>>

Assume A Ltd issues 100,000 shares at a fair value of $1 each to acquire the net assets of B Ltd. The journal entry by A Ltd to record the acquisition of the net assets of B Ltd would include:

		gain on bargain purchase of $5,000.
		goodwill of $15,000.
		gain on bargain purchase of $15,000.
		goodwill of $5,000.