Reference no: EM132618080

Problem 1: Axe Man Limited acquired 100% of the share capital of Flannel Limited. At the date of the acquisition, the carrying value of Flannel Limited's land was $50 000. The fair value of the land on acquisition date was $82 000. The company tax rate was 30%. The Business Combination Valuation Entry to be recognised by Axe Man Limited for the land at acquisition date is:

Select one:

Option a.

DR Land $ 32,000

CR Deferred Tax Liability $ 9,600

CR BCVR $ 22,400

Option b.

DR Land $ 32,000

CR BCVR $ 32,000

Option c.

DR Land $ 22,400

CR BCVR $ 22,400

Option d.

DR Land $ 22,400

DR Deferred Tax Asset $ 9,600

CR BCVR $ 32,000

Option e.

DR Land $ 32,000

CR Deferred Tax Asset $ 9,600

CR BCVR $ 22,400