Reference no: EM132618060

Problem 1: Eliminator Limited acquired the identifiable assets and liabilities of La Grange Limited for $268 000. The items acquired, stated at fair value at the acquisition date, are: plant $144 000; inventory $80 000; accounts receivable $36 000; patents $20 000; and accounts payable $32 000. This acquisition will result in Eliminator recording:

Select one:

Option a. a gain on bargain purchase of $20 000.

Option b. a gain on bargain purchase of $32 000.

Option c. goodwill of $20 000.

Option d. goodwill of $248 000.

Option e. none of the other options.