2. Undervalued and unrecorded assets, unrecorded liabilities, pre-acquisition reserves transfers Ron Lid operates a number of supermarkets with an emphasis on supplying high-quality produce. The operations of Sam Ltd are primarily in the fine fruit market. Believing that the acquisition of Sam Ltd would enable Ron Led to expand its supply to its customers, Ron Ltd commenced actions to acquire the shares of Sam Ltd. On 1 July 20X3, Ron Ltd acquired all the issued shares (cum div. ) of Sam Ltd for $123 500. At this date the equity of Sam Ltd consisted of: Share capital $100 000 Reserves 5000 Retained earnings 10 000 On 1 July 20X3, Sam Ltd had recorded a dividend payable of $6000 and goodwill of $5000 (net of accumulated impairment losses of $7000). The dividend was paid in August 20X3. In the previous year's annual report Sam Ltd had reported the existence of a contingent liability for damages based upon a lawsuit by a customer who had slipped on some fallen fruit in one of the stores operated by Sam Ltd. Ron Ltd calculated that this liability had a fair value of$10 000. Sam Ltd also had some customer databases that were not recorded as assets but Ron Ltd placed a fair value of $6000 on these items. Sam Lid believed that the databases had a future life of 4 years. All of the identifiable assets and liabilities of Sam Ltd were recorded at amounts equal to their fair values except for the following: Carrying Fair amount value Plant (cost $120 000) $94 000 $96 000 Land 80 000 85 000 Inventories 20 000 24 000 The plant had an expected remaining useful life of 10 years. The land was sold by Sam Ltd in February 20X5. The inventories were all sold by 30 June 20X4. In February 20X6, Sam Ltd transferred $3000 of the reserves on hand at 1 July 20X3 to retained earnings. The remaining $2000 was transferred to retained earnings in February 20X7. The court case involving the damages sought by the customer was settled in May 20X7. Sam Ltd was required to pay $7500 to the customer. Required Prepare the consolidation worksheet entries for Ron Ltd's group at 30 June 20X7