On 1 January 20X0, Linda Ltd Acquired 100 % of the Share

Multiple Choice

On 1 January 20X0, Linda Ltd acquired 100 % of the share capital of Yoko Ltd for $900 000 cash.At that date, the equity section of Yoko Ltd's balance sheet was as follows:
\begin{array}{llcc} \text { } &\$ \\ \text {Share capital } &900000\\ \text {Retained profits } &400000\\ \text {Asset revaluation reserve } &300000\\end{array}
Assuming all assets and liabilities were recorded at their fair values what will be the effect of the acquisition on the financial statements?

A) Goodwill will be increased by $700 000 in Linda's separate statements
B) Bargain purchase will be increased by $700 000 in the Linda Group consolidated statements
C) Bargain purchase will be increased by $700 000 in the Linda separate statements
D) Goodwill will be increased by $400 000 in Yoko's separate statements