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