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 were $140 000,and given a tax rate of 30%,the group income tax expense would be:

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Quizplus · Accepted Answer

The group income tax expense is calculated on the trading profit before tax, which is $140,000. With a tax rate of 30%, the tax expense is $140,000 * 30% = $42,000. The gain on bargain purchase does not affect the calculation of income tax expense.

A Company Records a Gain on Bargain Purchase of $40