Knoplfer Limited acquired the net assets and contingent liabilities of Straits Limited for $70 000 cash. The fair value of Straits Limited's net assets and contingent liabilities were: total assets $96 000; total liabilities $15 000; and contingent liabilities $7 000. When recording the business combination, Knoplfer Limited will record a:

Select one:

a.gain on bargain purchase of $4000.

b.goodwill of $4000.

c.goodwill of $11 000.

d.gain on bargain purchase of $70 000.

e.none of the other options.