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Financial Accounting and Reporting On 1 January 2018, Investor Ltd paid $1,720,000 for a 40% interest in Associate Ltd when the equity of Associate Ltd

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On 1 January 2018, Investor Ltd paid $1,720,000 for a 40% interest in Associate Ltd when the equity of Associate Ltd consisted of $3,000,000 share capital and $1,200,000 retained earnings. There has been no change in share capital of Associate Ltd since then. Both firms' accounting period is from 1 January to 31 December and their income tax rate is 30%. On this date, all the identifiable net assets of Associate Ltd were recorded at fair value except for the following: Additional information: 1. Associate Ltd's financial statements show that retained earnings were $1,500,000 as at 1 January 2019 , and profit and dividend were $190,000 and $10,000, respectively, for 2019 . 2. On 15 November 2019, Associate Ltd sold inventory to Investor Ltd at a profit before income tax of $20,000. Investor Ltd sold 60% of this inventory by 31 December 2019 . 3. On 1 January 2018, Associate Ltd sold some furniture to Investor Ltd for $300,000, with Associate Ltd recording a profit before income tax of $50,000. The furniture had a further 5 year life. 4. On 10 December 2019, Investor Ltd sold inventory to Associate Ltd for $100,000 with a profit before income tax of $20,000. Associate Ltd still has this inventory on hand by 31 December 2019. Required: 1) Calculate the amount of goodwill arising from investment in Associate Ltd. (8 marks) 2) Determine the balance of "Investment in Associate" as at 31 December 2018. (13 marks) 3) Determine the amount of "Profit from investment in Associate" for 2019 and provide a journal entry to record this amount on the books of Investor Ltd. (14 marks)

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