On 1 January 20X0, Zed Ltd Acquired 90 % of the Share

Multiple Choice

On 1 January 20X0, Zed Ltd acquired 90 % of the share capital of Ned Ltd for $900 000 cash.At that date, the equity section of Ned Ltd's balance sheet was as follows:
$\begin{array}{llcc}&\$\\ \text {Share capital } &700000 \\ \text { Retained profits} &50000\\ \text { Asset revaluation reserve } &100000\\\end{array}$


Assume all assets and liabilities were recorded at their fair values, except for a piece of equipment recorded at $50 000 but Zed Ltd considers it to have a fair value of $100 000. This equipment is not revalued by Ned Ltd.
The difference on acquisition is:

A) a larger amount of goodwill under the partial goodwill method compared with the full method
B) a larger amount of goodwill under the full goodwill method compared with the partial method
C) neither A nor B above because the difference is a bargain purchase
D) not conclusively comparable under the full or partial methods from the available information