Fredericks Limited Acquired the Identifiable Assets and Liabilities of Nicole

Multiple Choice

Fredericks Limited acquired the identifiable assets and liabilities of Nicole Limited for $134 000. The items acquired, stated at fair value, are: Plant $72 000 Inventory $40 000 Accounts receivable $18 000 Patents $10 000 Accounts payable $16 000. The difference on acquisition is:

A) Gain on bargain purchase $10 000
B) Gain on bargain purchase $16 000
C) Goodwill of $10 000
D) Goodwill of $124 000.