Use the Following Information to Answers

Multiple Choice

Use the following information to answers
Edward Ltd acquires all issued shares in Jacob Ltd for $220 000 paid in cash. Equity of Jacob Ltd consists of $130 000 share capital and $45 000 retained earnings. At acquisition date, Jacob Ltd owns a block of land, which it initially purchased at $200 000. The fair value of the land is $240 000. The carrying amount of Jacob Ltd's property, plant and equipment is $130 000 with accumulated depreciation of $55 000. The fair value of the property, plant and equipment is $95 000.
-If the tax rate is 30%, what would be the amount of Business Combination Value Reserve that must be recognised at the acquisition date?

A) $42 000
B) $45 000
C) $52 500
D) $60 000