Laugh’n A Half Limited acquired all the shares in Silverflame Limited for a 550,

Laugh’n A Half Limited acquired all the shares in Silverflame Limited for a 550,000 cash consideration. The shares were acquired on a cum. div. basis. At acquisition date, Silverflame Limited had declared a dividend of 90,000. The equity of Silverflame Limited at acquisition date consisted of:Share Capital $250,000Retained Earnings $60,000All of the identifiable net assets were recorded at their fair value in the books of Silverflame Limited, except for its buildings which had, at acquisition date, a recorded cost of 60,000, accumulated depreciation of 15,000, and a fair value of 65,000.The tax rate is 30%.The pre-acquisition entry on acquisition date is:a.Dr Retained Earnings $ 60,000Dr Share Capital $ 250,000Dr BCVR $ 240,000 Cr Investment in Silverflame $ 460,000 Cr Revenue from Dividends $ 90,000b.Dr Retained Earnings $ 60,000Dr Share Capital $ 250,000Dr Building $ 14,000Dr Goodwill $ 226,000 Cr Investment in Silverflame $ 550,000c.Dr Retained Earnings $ 60,000Dr Share Capital $ 250,000Dr BCVR $ 150,000 Cr Investment in Silverflame $ 460,000:d.Dr Retained Earnings $ 60,000Dr Share Capital $ 250,000Dr Building $ 14,000Dr Goodwill $ 136,000 Cr Investment in Silverflame $ 460,000 Cr Revenue from Dividends $ 90,000e.Dr Retained Earnings $ 60,000Dr Share Capital $ 250,000Dr BCVR $ 240,000 Cr Investment in Silverflame $ 550,000 q2:Willy Limited purchased 100% of the shares in Nelson Limited on 1 July 2020, for a cash consideration of $ 1,200,000. On that date, the equity balances of Axton Limited were:Share Capital $950,000Retained Earnings $350,000All of the identifiable net assets were recorded at their fair value in the books of Axton Limited. The tax rate is 30%. The pre-acquisition entry on 30 June 2022 would include a: a.Cr Gain on Bargain Purchase $ 100,000b.Dr Goodwill $ 100,000c.Dr BCVR $ 70,000d.None of the other options.e.Dr Retained Earnings (1/7/21) $ 250,000
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