Question
Wabbit Limited purchased 100% of the shares in Malarkey Limited on 1 July 2022, for a cash consideration of $ 1,300,000. On that date,
Wabbit Limited purchased 100% of the shares in Malarkey Limited on 1 July 2022, for a cash consideration of $ 1,300,000. On that date, the equity balances of Malarkey Limited were: Share Capital $1,150,000 Retained Earnings $200,000 All of the identifiable net assets were recorded at their fair value in the books of Malarkey Limited. The tax rate is 30%. The pre-acquisition entry on acquisition date would include a: a. Dr Retained Earnings $ 150,000 b. Cr Gain on Bargain Purchase $ 150,000 C. Dr Goodwill $ 150,000 d. Dr BCVR $ 75,000 e. None of the other options
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