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.