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This scenario related to question 4 and 5. On 1 January 2016 , Donald Ltd purchased 100% of the shares of Duck Ltd for $190,000.
This scenario related to question 4 and 5. On 1 January 2016 , Donald Ltd purchased 100% of the shares of Duck Ltd for $190,000. At that date, the equity of Duck Ltd was as follows: At 1 January 2016, the recorded amounts of Duck Ltd's assets and liabilities were equal to their fair values except plant and machinery. At that date, cost of plant and machinery was $120,000, accumulated depreciation- plant and machinery was $40,000 and fair value was $90,000. The plant and machinery still have 5 years remaining life. Tax rate is 30%. Q4. Compute goodwill / gain on bargain purchase. Select one: A. $35,000 B. $33,000 C. $40,000 D. $30,000 Assume the plant and machinery (net) reported by Donald Ltd and Duck Ltd as at Dec 31,2018 were $250,000 and $200,000 respectively. Compute consolidated balance of plant and machinery (net) for the year ended Dec 31, 2018. Select one: A. $458,000 B. $420,000 C. $454,000 D. $460,000
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