A Company Records a Gain on Bargain Purchase of $40,000

question 18

Multiple Choice

A company records a gain on bargain purchase of $40,000 on the acquisition of a subsidiary.Assuming there are no other tax adjustments for any companies,if the trading profit of the group before tax was $140,000 and given a tax rate of 30% the group income tax expense would be:

• A) $42,000
• B) $54,000
• C) $30,000
• D) none of the above

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