Reference no: EM132618083
Problem 1: Wicked Limited acquired 100% of the share capital of Games Limited. At the date of the acquisition, the buildings recorded in Games Limited's financial statement had a cost value $115 000 and accumulated depreciation 51,000. The fair value of Games Limited's Buildings on acquisition date was $71 000. The company tax rate was 30%. The Business Combination Valuation Entry to be recognised by Wicked Limited for the Building at acquisition date is:
Select one:
Option a.
DR Accumulated Depreciation $ 51,000
CR Buildings $ 44,000
CR Deferred Tax Liability $ 2,100
CR BCVR $ 4,900
Option b.
DR Buildings $ 7,000
CR Deferred Tax Liability $ 2,100
CR BCVR $ 4,900
Option c.
DR Accumulated Depreciation $ 44,000
DR Buildings $ 7,000
CR Deferred Tax Liability $ 2,100
CR BCVR $ 48,900
Option d.
DR BCVR $ 30,800
DR Deferred Tax Asset $ 13,200
CR Building $ 44,000
Option e. None of the other options.