16.26 Complex direct acquisition of a business using shares Watson Ltd purchased from Dickson Ltd the following parcel of assets and liabilities representing a business: cost of acquisition was $20000 cash, plus 20000 fully paid ordinary shares in Watson Ltd, which were trading at $1.10 on the ASX. After the transaction, Dickson Pty Ltd continued in business otherwise unaffected. Recorded by DICKSON LTD Accumulated depreciation or estimated uncollectible debts $ 4000 Item Accounts receivable Land Vehicles Equipment Accounts payable Cost $ 10000 10000 15000 20000 (10000) 45000 Carrying amount $ 6000 10000 12000 15000 (10000) 33000 Fair value $ 3000 20000 8000 15000 (10000) 3000 5000 36000 Required: (a) Prepare journal entries to record the acquisition of assets and liabilities by Watson Ltd. 16.27 Complex direct acquisition of assets for cash On 30 July 20X3, Skase Ltd acquired a parcel of assets for cash from Ackland and Associates Pty Ltd for $8000 cash. After the acquisition the vendor continued to operate. Recorded by ACKLAND AND ASSOCIATES PTY LTD Cost Item Accumulated depreciation Carrying amount Fair value $ $ $ $ Land 35000 35000 40000 Buildings 50000 20000 30 000 40000 Equipment 10000 5000 5000 4000 95000 25000 70000 84000 Required: (a) Prepare journal entries to record the acquisition of assets and liabilities by Skase Ltd: (i) assuming the acquisition of a business; and (ii) assuming that the acquisition is not a business