Jiminez Limited Acquired 80% of the Shares in Mustang Limited

Multiple Choice

Jiminez Limited acquired 80% of the shares in Mustang Limited for $150 000. At acquisition date, share capital in Mustang was $150 000 and reserves amounted to $50 000. All assets and liabilities of Mustang were recorded at fair value at acquisition date. The partial goodwill method is adopted by the group. If the company tax rate was 30%, the NCI will recognise a gain on bargain purchase of:

A) Nil.
B) $10 000.
C) $40 000.
D) $50 000.