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; inventories $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.