81.In 2012, BHP Ltd made a business decision to acquire shale oil assets to expand its oil and gas production. It made a bid for the United States firm, Petrohawk Inc, and paid $15 billion for the company. BHP assessed the fair value of the assets of Petrohawk to be $20 billion and its liabilities to be $8 billion.

Required:

1. Prepare the general journal entry for the acquisition in 2012. A narration is required.
2. Explain what the accountant is required to do each financial year with regards to the value recorded for the Petrohawk acquisition.
3. Based on subsequent events, when BHP took an impairment charge, and then sold Petrohawk for a significant loss, how would you describe the business strategy that BHP pursued when they purchased Petrohawk?
4. Explain why an accountant may have made inaccurate valuations of the Petrohawk acquisition at the time of purchase