Reference no: EM132624943
Question - The Parent Ltd acquired Subsidiary Ltd 80% shareholders equity on 1 July 2016 for $250,000. At that date, Subsidiary Ltd had a share capital of $200,000 and Retained earnings of $300,000. What is the consolidation entry required for the year ending 30 June 2018?
A. Dr Goodwill 110,000
Dr Investment in Subsidiary Ltd 250,000
Cr share capital $200,000
Cr retained earning $160,000
B. Dr Goodwill 200,000
Dr Investment in Subsidiary Ltd 250,000
Cr share capital $250,000
Cr retained earning $200,000
C. Dr share capital $250,000
Dr retained earning $200,000
Cr Gain on bargain purchase 200,000
Cr Investment in Subsidiary Ltd 250,000
D. Dr share capital $200,000
Dr retained earning $160,000
Cr Gain on bargain purchase 110,000
Cr Investment in Subsidiary Ltd 250,000