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Mama Limited acquired 100% of the share capital of Blue Limited for $237 500. Blue had total shareholders equity of $200 000. The book values
Mama Limited acquired 100% of the share capital of Blue Limited for $237 500. Blue had total shareholders equity of $200 000. The book values of Blues assets were: buildings $100 000, machinery $120 000. The fair values of these assets were: buildings $120 000, machinery $125 000. The tax rate is 30%. The acquisition analysis will determine:
a Gain on bargain purchase of $12 500. a Gain on bargain purchase of $37 500. a Goodwill of $37 500. a Goodwill of $20 000.
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