Question
Axe Man Limited acquired 100% of the share capital of Flannel Limited. At the date of the acquisition, the carrying value of Flannel Limited's land
Axe Man Limited acquired 100% of the share capital of Flannel Limited. At the date of the acquisition, the carrying value of Flannel Limited's land was $50 000. The fair value of the land on acquisition date was $82 000. The company tax rate was 30%. The Business Combination Valuation Entry to be recognised by Axe Man Limited for the land at acquisition date is:
Select one:
a.
DR Land $ 32,000
CR Deferred Tax Liability$ 9,600
CR BCVR$ 22,400
b.
DR Land $ 32,000
CR BCVR$ 32,000
c.
DR Land $ 22,400
CR BCVR$ 22,400
d.
DR Land$ 22,400
DR Deferred Tax Asset $ 9,600
CR BCVR$ 32,000
e.
DR Land $ 32,000
CR Deferred Tax Asset$ 9,600
CR BCVR$ 22,400
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