Business Combinations 15 Marks uestion Chefs Ltd, a supplier of sporting merchandise acquired the business of Low Ltd in an attempt to increase market share. On 1 April 2018, Chefs Ltd took over all the assets and liabilities of Low's, excluding cash and the bank loan. The consideration transferred consisted of cash of S100 000 payable on 1 April 2018 and the remainder of the consideration to be satisfied by issuing 30 000 fully paid shares in Chefs, with a fair value of S2.10. The trial balances of the two companies as at 1 April 2018 were as follows Chefs Ltd Low Ltd Share capital Retained earnings $300 000 S190 000 26 000 48 000 Provision for employee entitlements Bank Loarn Cash Plant&Equipment (net) Inventory Accounts receivable Land Goodwill 5 000 10 000 20000 46 000 200 000 28 000 16 000 41 000 10 000 90 000 52 000 20000 S331 000 S331 000 $220 000 $220 000 All the identifiable net assets of Low Ltd were recorded at fair values except for inventory which was considered to have a fair value of $60 000. In addition, the Low's brand name, which was not listed on its Statement of Financial Position was specifically identified in the purchase contract to have an agreed fair value of $20 000. A contingent liability of $15 000 was recorded in the financial statements of Low Limited for a pending legal issue. Chefs Ltd incurred legal costs of $10 000 in relation to the acquisition and $1 500 in share issue costs as a result of issuing shares as part of the consideration. The reporting year for Chefs Ltd is 1 July to 30 June Required: Prepare all the relevant journal entries in the records of Chefs Ltd to record the acquisition of Low Ltd, in accordance with IFRS 3 Business Combinations. Show all workings. (15 marks)