Mary Limited acquired the identifiable assets and liabilities of Joan Limited. The items acquired are: equipment $296000; inventories $160 000; accounts receivable $90 000 (fair value $104 000); patents $60000; accounts payable $80000.

The net assets were acquired for consideration of $530 000. The difference on acquisition is:

Question 28Answer

a.

Goodwill of $10 000

b.

Goodwill of $170 000

c.

Gain on bargain purchase of $10 000

d.

Gain on bargain purchase of $156 000

e.

Goodwill of $4 000