Coolum Ltd Acquired a Business from Mudjumba Ltd on 1

Multiple Choice

Coolum Ltd acquired a business from Mudjumba Ltd on 1 July 2011 for a purchase consideration of $500 000 cash.At this date,the identifiable assets of Mudjimba Ltd had a fair value of $600 000 and the liabilities had a fair value of $70 000.Identify whether Collum Ltd should recognise goodwill or a gain on bargain purchase and the correct amount.

A) goodwill of $100 000
B) gain on bargain purchase of $100 000
C) gain on bargain purchase of $30 000
D) goodwill of $30 000