Exercise 28.3 (Loftus et al., 2023, p. 901)

On 1 July 2024, Moree Ltd acquired all the issued shares of Gundagai Ltd, paying $300,000 cash. At that date, the financial statements of Gundagai Ltd showed the following information.

Share capital	160 000
Retained earnings	90 000

All the assets and liabilities of Gundagai Ltd were recorded at amounts equal to their fair values at the acquisition date, except some inventories recorded at $5,000 below their fair value. Also, Moree Ltd identified at acquisition date a patent with a fair value of $55,000 that Gundagai Ltd has not recorded in its own accounts.

Required

1. Prepare the acquisition analysis at 1 July 2024.
2. Prepare the consolidation worksheet entries for Moree Ltds group at 1 July 2024.
3. Discuss how the answers for 1 and 2, above, would change if Moree Ltd paid only $275,000 cash for the shares in Gundagai Ltd.

in question 2, if your answer is below what could the the credit entry?

Consolidation Worksheet Entries for Moree Ltd's Group at 1 July 2024: The consolidation worksheet entries are necessary to consolidate the financial statements of the subsidiary, Gundagai Ltd, into the financial statements of the parent, Moree Ltd. The entries are as follows: Explanation: - Debit Share Capital - Gundagai Ltd: - Debit Retained Earnings - Gundagai Ltd: $90,000 - Debit Business Combination Valuation Reserve - Inventory: $5,000 - Debit Business Combination Valuation Reserve - Patent: $55,000 - Debit Investment in Gundagai Ltd: $300,000 - Debit Goodwill: $10,000, if all debit what will be the credit?