Lu Nan Limited Acquired 70% of the Share Capital and Reserves

Multiple Choice

Lu Nan Limited acquired 70% of the share capital and reserves of Hui Limited for $36 000. Share capital was $18 000 and reserves amounted to $10 800. All assets and liabilities were recorded at fair value except plant which was recorded at $2 500 below fair value. The company tax rate was 30%. The partial goodwill method is adopted by the group. The amount of goodwill acquired by Lu Nan Limited in this business combination was:

A) $8 640.
B) $9 165.
C) $10 800.
D) $14 615.