Undervalued and unrecorded assets  LO3, 6 On 1 July 2019, Michelle Ltd acquired all the issued shares of Tracy Ltd, paying $250 000 cash. At that date, the financial statements of Tracy Ltd showed the following information. Share capital $100 000 Retained earnings 100 000 All the assets and liabilities of Tracy Ltd were recorded at amounts equal to their fair values at the acquisition date, except some inventories recorded at $10 000 below their fair value. Also, Michelle Ltd identified at acquisition date a patent with a fair value of $40 000 that Tracy Ltd has not recorded in its own accounts. Required 1. Prepare the acquisition analysis at 1 July 2019. 2. Prepare the consolidation worksheet entries for Michelle Ltd’s group at 1 July 2019. 3. Discuss how the answers for 1 and 2 above would change if the Michelle Ltd paid only $200 000 cash for the shares in Tracy Ltd.