On 1 July 2023 Pea Ltd acquired all assets and assumed accounts payable of Sugar Ltd. On this date all assets and liabilities of Sugar Ltd were at fair value: Accounts receivable (net) $29,000, Inventory $35,000, Building $290,000, Accounts payable $25,000, Provision for Long Service Leave $50,000, and Bank Loan $150,000. In exchange it was agreed that Pea Ltd would transfer the following: Sufficient cash to enable Sugar Ltd to pay its outstanding liabilities, including liquidation costs of $25,000. Two (2) shares in Pea Ltd for every four (4) shares held in Sugar Ltd. The share capital of Sugar Ltd revealed a balance of $120,000 (shares issued at $1.50). The fair value of each Pea Ltd share was $3.50 on 1 July 2023. After comparing the total of "Fair Value of Identifiable Net Assets" acquired and the total of "Consideration transferred", Pea Ltd should recognise: Select one:

a. Goodwill $11,000 

b. Gain on Bargain Purchase $36,000 

c. Goodwill $36,000 

d. Goodwill $24,000

Answer rating: 100% (QA)

The total value of the identifiable net assets of Sugar Ltd that Pea Ltd acquired can be calculated ... View the full answer