What is the amount of goodwill or gain on bargain purchase

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Reference no: EM132986299

On 30 June 2020, Ice Ltd acquired all the issued shares (cum div.) of Cream Ltd for $323 000. At this date, the financial statements of Cream Ltd showed the following balances in its accounts.

Share Capital $ 186 000

Retained earnings $ 128 000

General Reserve $ 37 000

Dividend Payable $ 27 000

At acquisition date, all the identifiable assets and liabilities of Cream Ltd were recorded at amounts equal to fair value except for the following:

Carrying amount Fair value

Inventories $15 000 $36 000

Plant (cost $100 000) $60 000 $66 000

The company tax rate is 30%.

Problem1 : What is the amount of Goodwill or Gain on Bargain Purchase arising from the business combination? Please enter a positive number to indicate Goodwill or a negative number to indicate Gain on Bargain Purchase.

Reference no: EM132986299

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