Mary Limited Acquired the Identifiable Assets and Liabilities of Joan

Multiple Choice

Mary Limited acquired the identifiable assets and liabilities of Joan Limited for $530 000. The items acquired, stated at fair value, are: equipment $296 000; inventories $160 000; accounts receivable $104 000; patents $60 000; accounts payable $80 000. The difference on acquisition is:

A) goodwill of $10 000
B) goodwill of $170 000
C) gain on bargain purchase $10 000
D) gain on bargain purchase $170 000