25.12 Accounting by acquirer, liquidation journal entries by acquiree LO6, 7 The financial statements of Sicily Ltd at 1 August 2022 contained the following information. $144 000 76 800 220 800 Assets Vehicles Accumulated depreciation Delivery trucks Accumulated depreciation Machinery Accumulated depreciation Buildings Accumulated depreciation Land $ 90 000 (13200) 105 000 (18 600) 59 400 (9000) 144 000 (12 000) 240 000 Equity Share capital: 150 000 shares Retained earnings Total equity Liabilities Loans Provisions Payables Accounts payable Total liabilities 192 000 84 000 126 000 56 400 458 400 Cash Accounts receivable Inventories Total assets 6 000 36 000 51 600 $679 200 Total equity and liabilities $679 200 Sicily Ltd is involved in the manufacture of fine Italian leather handbags. The company was established by the de Niro brothers over 100 years ago. The family became very wealthy as their handbags were prized by the fashion conscious in the community. However, the current manager, Roberto de Niro, wishes to retire and offers to sell the business to his main rival, Al Ltd, which is headed up by the manager and owner, Vito Corleone. Vito and Roberto come to an agreement by which Al Ltd will take over Sicily Ltd. Al Ltd will acquire all the assets of Sicily Ltd except for the cash and the motor vehicles. In exchange, Al Ltd will give the shareholders of Sicily Ltd a block of land valued at $288 000 and a motor vehicle valued at $61 200. These assets are currently held by Al Ltd. The land is carried at cost of $120 000 while the motor vehicle is carried at $60 000, being cost of $63 000 and accumulated depreciation of $3000. Al Ltd will also provide sufficient additional cash to enable Sicily Ltd to pay off the accounts payable and the liquidation expenses of $3600. On liquidation of Sicily Ltd, the land and the motor vehicles will be distributed to members of the de Niro family. Al Ltd incurred legal and valuation costs of $6000 in undertaking the business combination. The assets and liabilities of Sicily Ltd are recorded at amounts equal to fair value except for the following Fair value Land Buildings Machinery Delivery trucks Inventories $300 000 168 000 60 000 90 000 60 000 Al Ltd also recognised the brand 'Sicily' that was not recognised in the records of Sicily Ltd as it was an internally developed brand. It was calculated that this brand had a fair value of $78 000. Required Prepare the journal entries in Al Ltd to record the acquisition of the assets and liabilities of Sicily Ltd