Cars Ltd acquired 65% of Trucks Ltd for a cost of $650,000, when the equity of Trucks Ltd consisted of:

Share Capital

$210,000

General Reserve

$90,000

Retained Earnings

$30,000

All the identifiable assets and liabilities of Cars Ltd were recorded at fair value except for the following:

Carrying Amount

Fair Value

Vehicles (cost $550,000)

$450,000

$490,000

Equipment

$80,000

$90,000

Required:

Prepare the journal entries for the pre-acquisition stage (i.e., Stage 1) of recording the pre-acquisition elimination and Non-Controlling Interest both using the partial goodwill method.