CLIO I CILIU imediately after the busines combination C. Prepare the Liquidation Account and the Shareholders Distribution Account in Eastwood Ltd stion 12.8 Accounting for an acquirer, liquidalion of acquiree 105.7 600 The statement of financial position of Biel Lid at 1 July 2016 was as follows: $ 48000 47040 95040 Cash Accounts receivable Inventory Buildings Accumulated depreciation Fixtures Accumulated depreciation Plant and equipment Accumulated depreciation Goodwill Total assets $ 9000 Share capital (48000 shares) 27760 Retained earnings 22680 100000 (20000) Accounts payable 40000 Guarantees (16000) Loans 50000 (13200) 1600 $201840 Total equity and liabilities 34800 32000 40000 106800 S201840 Jessica Ltd acquired all the assets except cash of Biel Ltd on 1 July 2016. Jessica Lid deler- mined the fair values of all the identifiable assets and liabilities at acquisition date and deter- mined that the only identifiable items that were not recorded at amounts equal to fair values were: Fair value $ 30000 100000 Inventory Buildings Fixtures $ Plant and equipment Guarantees 25000 38000 (33000) Jessica Ltd also determined that Biel Lid had not recorded the accrued interest on the loans, amounting to $2200. In exchange for the assets of Biel Lid, Jessica Ltd agreed to provide sufficient additional cash to enable Biel Lid to pay off its debts as well as liquidation costs of $2000. In addition, Jessica Lid would pay two fully paid shares in Jessica Lid for every three shares held in Biel Lid. The fair value of each Jessica Ltd share was agreed to be $2.50. Costs of issuing the shares amounted to $1000. Required A. Prepare the journal entries in the records of Jessica Ltd to record its acquisition of the assets of Biel Ltd at 1 July 2016, B. Prepare the Liquidation, Liquidator's Cash and Shareholders Distribution accounts of Biel Lid. STUDENT ACTIVITY SEG