Question
Xmen Ltd purchased all the shares of Logan Ltd on 1 Jan 20X8 for $500,000. On that date, Logan Ltds equities had share capital of
Xmen Ltd purchased all the shares of Logan Ltd on 1 Jan 20X8 for $500,000. On that date, Logan Ltds equities had share capital of $300,000, general reserve of $50,000, and retained profits of $120,000. On the control date, the fair value of Logan Ltds net assets was $20,000 lower than their carrying amount. How much consolidation goodwill/bargain purchase gain should be reported in the consolidated financial statements?
A. $30,000 consolidation bargain purchase gain
B. $30,000 consolidation goodwill
C. $50,000 consolidation goodwill
D. $50,000 consolidation bargain purchase gain
PLEASE PROVIDE A CALCULATION AND EXPLANATION!!! AND HOW COME THE ANSWER IS "C"
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started