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In June 2019, Uni Ltd

Accounting

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In June 2019, Uni Ltd. made an offer to the shareholders of ABC Ltd. to acquire a controlling interest in the company. Uni Ltd. was prepared to pay HK$ 1.50 cash per share, provided that 70% of the shares could be acquired (enough shares to gain control).

The directors of ABC Ltd. recommended that the offer be accepted. By July 1^st 2019, when the offer expired, 85% of the shares had changed hands and were now in the possession of Uni Ltd. The statement of financial position of ABC Ltd. on that date is shown below.

At July 1^st 2019, all the identifiable assets and liabilities of ABC Ltd. were recorded at amounts equal to fair value. Uni Ltd. uses the full goodwill method.

Additional information:

1. The share price of the ABC Ltd. is equal to HK$ 1.40 at acquisition date.
2. Income tax rate is equal to 30 %.

Required:

Please calculate the goodwill / gain on bargain purchase.